The housing market has been on a roller coaster ride over the past several years with no definitive sign of a lasting recovery in sight. Recent data, however, suggests that home construction is on the rise and may be a sign of better times ahead.
According to information released by the U.S. Census Bureau, new home construction jumped an impressive 12.3% in April 2019 compared to the same month in 2018. The jump in new construction is the strongest it’s been in the past five years and marks the 12th consecutive month that housing starts have risen in the country.
Analysts believe the jump in housing starts is a sign of an improving economy as well as the need for more housing in areas that are seeing population growth or home remodeling demand. There is also a lot of talk about relaxed lending standards helping drive up the numbers.
This positive news has been echoed in the stock market as homebuilders, construction companies, and related industries have all seen their shares rise in light of the new housing data. Speculators believe that the market for new homes will remain strong throughout the rest of the year, further boosting the economy while bringing in more jobs.
The last few years have been bad for the housing market, with runs of oversupply and weak consumer confidence. The new home construction numbers suggest that the tide is starting to turn, with consumer optimism on the rise and more people looking to purchase new homes.
It may be too soon to tell if the housing market has finally reached bottom. But the strong housing starts data from April is certainly a positive indicator that better days are ahead. With the economy continuing to show signs of recovery, potential greater housing demand should drive the market into a sustained rebound.