The construction activity in the new homes segment bounced up a little in the month of December 2013 taking the construction industry in U.S. to all time high in the nine years.
The Commerce Department stated, in December 2014, builders began constructing at a seasonally adjusted annual rate of 1.09 million, which was a hike of 4.4% as compared to November when harsh weather conditions discourage work.
In 2014 builders started construction of 1.01 million new apartment and homes, which is a rise of 8.8% from 2013. This happens to be the first time that number of construction units crossed 1 million ever since the housing industry registered its initial growth in 2005. It was only in 2010 that construction activity slumped to 587,000 homes. However, it has been making a slow recovery since then.
In the same period, the construction of single-family houses was up by 7.2%, whereas the small apartment sector dropped 0.8%. The drop in applications for building licenses was lower by 1.9% to 1.03 million in December after a 3.7% drop in November.
Irrespective of a slump in building permits, analysts predict that construction in the housing sector will witness a rise in 2015. This positive outlook is a result of increasing employment opportunities and suitable demographics which will drive the construction activity for the younger generation that will make decisions to buy homes.
Even though new home construction activity represents only a miniscule part of the housing market, it will have a larger impact on the economy as. Every home construction creates an three jobs and leads to about US$90,000 in tax revenue.