The giant cheering sound you hear is builders celebrating today’s economic releases.
Two economic indicators released Thursday—single-family construction spending and a pending home-sales index—both posted significant gains in August.
Produced by the National Association of Realtors (NAR), the pending home-sale index measures contracts signed. It grew 6.4% in August, which is the seventh monthly gain in a row. “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month,” said Lawrence Yun, NAR’s chief economist.
Such activity is occurring just about everywhere, according to the NAR data. On a monthly basis, the index posted a 16% jump in the West, an 8.2% gain in the Northeast, and a 3.1% rise in the Midwest. The South recorded an 0.8% increase.
Government data from the U.S. Census Bureau also showed improvements in new-home construction. While overall construction spending for the nation remained flat in August, growing just 0.8% on a monthly basis to a seasonally adjusted level of $941.9 billion, single-family residential posted a 4.5% increase. That brings new single-family to a seasonally adjusted spending level of $106.7 billion.
On an annual basis, that figure stands 39.6% below the same month one year ago.
Boosted by the single-family performance, residential construction spending moved up 4.7% on a monthly basis to a seasonally adjusted pace of $249.5 billion. Multifamily did not fare so well, slipping 4.5% to $27.8 billion in monthly seasonally adjusted spending in August.
Alison Rice is senior editor, online, at BUILDER magazine.