According to a report released from The Commerce Department this morning, U.S. builders started on more units and obtained construction permits at the fastest pace in 4.5 years. Builders began construction on 917,000 homes in February, up from 910,000 the month prior. Besides a high of 982,000 in September, this is the best month for U.S. home starts since June 2008, indicating the recovery from the housing crash is finally underway.
“The road ahead for housing is still, so far, looking promising,” said Jennifer Lee, economist at BMO Capital Markets.
Single-family homes have seen a vast improvement, as construction has increased to 618,000 units a year. Building permits have risen 4.6 per cent in markets such as the Northeast and Midwest.
According to Kimberley Marr, ReMax real estate broker and author, Canadian investors have played a huge part in that road to recovery.
“There are an enormous amount of foreigners buying, Canada, Brazilians, Europeans, Asians,” she said. “They see the value and they’re seeing the recovery.”
In a departure from previous offerings for Canadian investors, the U.S. market has a wealth of new inventory to offer as opposed to foreclosures, which have been popular in recent years.
The pace of foreclosures has slowed dramatically, and as consumer confidence has returned to the market, builders continue to break ground on new projects across the country. A recent survey indicates the outlook for sales over the next six months is at its highest level in over six years.
Despite the dwindling number of foreclosure properties available, Paul Diggle, property economist at Capital Economics, believes there is still a wealth of opportunity for Canadian investors. Diggle predicts housing prices will rise in 2013 by 8 per cent and 4 per cent after that.
“They’re gathering momentum,” he says. “We believe the rebound in the [U.S. housing] market is sustainable.”
What role do you think Canadian investors have played in the recovery of the US housing market?