“When you create jobs again in the housing market, you create some multiple of those jobs elsewhere,” said Brad Hunter, chief economist at Metrostudy, a national research firm that tracks new-home construction. “To build a house, you’re causing more demand for lumber, furniture, drapes, carpets, cement, steel, appliances . . . These are all industries that get stimulated by housing.”
That virtuous cycle is playing out in an increasing number of communities, helping to offset the vicious cycle of foreclosures and falling prices that have dragged down the market in recent years.
New-home starts are up nearly 30 percent over a year ago to an annual rate of more than 700,000, according to the most recent report from the Commerce Department. But the recovery is in its infancy with new-home construction still running at less than half of what it averaged in the decade leading up to the housing crash. A separate measure of home construction, permits for new homes, rose in May to an annual rate of 780,000 — its highest level in nearly four years.
How does that growth look on the ground?
In Greenville, S.C., where manufacturers such as General Electric and BMW have boosted hiring, the desire for new homes has kept developers busy.
“They are selling them about as fast as they can build them,” said Michael Dey, executive vice president of the local home builders association. “The challenge that we have now is that we’re going to hit a point that there aren’t enough finished lots to meet the demand.”
In Texas, the family-owned construction firm Sandlin Homes typically builds a couple hundred new houses each year in the Dallas-Forth Worth area. During the past six months, the company has sold 246.
“That’s more than all of 2011,” said owner Scott Sandlin, who has hired new office staff, construction superintendents and contractors to keep up with the work load. “And we’re just halfway through the year.”
In Windsor, Colo., a bustling town of 20,000 residents near Fort Collins, local officials planned on issuing about 200 permits for new single-family homes this year. Builders have pulled about that many permits through June alone.
“It’s been busy in the planning department,” said Scott Ballstadt, the town’s chief planner. “It’s a good thing.”
Home building has also begun to pick up in the Washington area. Single-family construction in the metro area is 50 percent higher than the low point of 2009. But that is still less than half of what it averaged during the decade before the crash.