According to the Commerce Department, of the 45,000 new houses sold in May, construction has not begun on 16,000, nearly 36 percent, up from 26 percent a year ago, and over two times the 14 percent rate from 2008 during the recession. Total new home sales in May rose to their fastest annualized pace since 2008, and permits for building new homes increased to a five-year high. As mortgage rates increase and prices continue to rise, would-be buyers will want to lock-in interest rates, and increasing values make homes a more attractive asset to lend against. However, as National Association of Home Builders Chief Economist David Crowe points out, builders still feel stymied by tight credit as well as shortages in available lots, labor and materials. He estimates starts on single-family homes will increase 150,000 over last year, as nationalmortgagenews informs MHProNews. These figures indicate strength in the home building market which translates into stimulus in the overall economy: Each new home creates three jobs, and triggers purchases of building materials as well as appliances and furniture.
