On August 21, 2012, in Did You Know, by Ken Fears, Manager, Regional Economics
- The sharp decline in inventory experienced this spring in most housing markets around the country has paid dividends for local economies. Permits issued by local governments for new single family home construction in the first six months of 2012 compared to the same time period in 2011 were up in 124 of the 159 markets reporting data or 78%.
- The National Association of Home Builders (NAHB) estimates that each new home built sustains 3 jobs, which in turn generate spending in the local economy.
- While new construction is up sharply from last year, it remains well below the initial six month average for each year from 2003 through 2009. For instance, permits in Boise, Idaho jumped by 79.5% compared to last year, but the 1,312 permits for new single family construction during the first six months of 2012 is well below the 3,812 average for the same 6-month time frame in each year from 2003 to 2009.
- Builders remain pensive and financing is tight, while many builders have exited the market altogether. The low level of supply will help to fuel price growth that will reduce the number of underwater owners nationally and help to generate demand necessary to absorb distressed sales as they grow as a share of the market this fall.
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