Residential Construction Spending Rose Year Over Year
Chicago, IL (PRWEB) April 02, 2014 -- Construction spending in the residential sector increased year over year in February. According to a joint report from the U.S. Department of Commerce, residential construction spending rose 8.7 percent in February, increasing to $365.2 million from $322.95 million in February 2013. The Federal Savings Bank finds this information bodes well for the housing sector.
Within the private construction sector specifically, spending rose to $360.4 million, up 13.5 percent compared to $317.4 million the year prior. New single-family construction spending climbed 13.6 percent year over year to $183.3 million from $161.3 million. New multifamily construction spending also advanced 29.7 percent to $37.4 million. In addition to the year-over-year gain, there was a 2.6 percent increase month over month compared to January's spending rate of $36.5 million, representing the only month-over-month increase for private construction spending.
Public residential spending also had a month-to-month gain, rising 5.1 percent to $4.9 million.
New construction could benefit inventory:
The Federal Savings Bank points out that one of the defining features of the housing recovery has been tight inventory, which has caused many first-time home buyers to choose between delaying their plans to purchase a home or entering competitive bidding wars to get a property they want. Increases in residential construction spending typically indicate that more new homes may become available.
The Federal Savings Bank predicts that housing starts will continue to increase throughout 2014, providing much-needed relief to inventory levels. This is welcome news to home buyers who have been having trouble finding available properties.
There are still some options for consumers:
While inventory is still tight across the U.S., there are many local markets that have a number of available homes. Realtor.com, the official website of the National Association of REALTORS, provided on March 27th, a list of the top 10 markets for first-time home buyers looking to make a new home purchase. Among the criteria used to determine the list - which included affordability, employment trends and market popularity - ample inventory was one of the key factors. Realtor.com used both median age of inventory and year-over-year change in inventory in their calculations.
"As we head into home-buying season, these markets show favorable conditions for first-time buyers, which is encouraging because these buyers are crucial to the housing market," said Steve Berkowitz, CEO of Move Inc. and operator of realtor.com. "First-time buyers have a widespread impact on the local housing markets. In transitioning from renters to owners, new buyers pay property taxes and other fees and taxes associated with homeownership that benefit local schools and services."
The Federal Savings Bank found that Pittsburgh topped the list, with a median age of inventory of 128. The median price was $135,000 and the unemployment rate was at a respectable 5.7 percent. The Steel City was followed by Tampa-St. Petersburg-Clearwater, Fla.; Philadelphia; and Fort Worth-Arlington, Texas. They each had median ages of inventory of 88, 141 and 67, respectively. Philadelphia had the highest median age of inventory of all markets on the list.
Contact the Federal Savings Bank, a veteran owned bank, for information about how low-cost mortgage options can help with a home purchase even if inventory is tight.
Giorgio Urbano Ferrero, The Federal Savings Bank, https://www.thefederalsavingsbank.com, +1 8473386062, [email protected]
Share this article