Housing Starts Most Since 2008: Another Election Day Barometer

Photograph by Daniel Acker/Bloomberg

Carpenters inside an apartment complex under construction in Peoria, Illinois.

There are all kinds of economic indicators.

Housing starts, in the aftermath of a housing bubble-turned financial crisis, are a big one.

And a month before the presidential election, this one will be noted:

Housing starts in the U.S. surged 15 percent in September to the highest level in four years, as Bloomberg’s Alex Kowalski reports today, adding to signs the industry at the heart of the financial crisis is on the road to recovery.

Starts jumped to an 872,000 annual rate last month, the most since July 2008 and exceeding all forecasts in a Bloomberg survey of economists, Commerce Department figures showed today in Washington. The median estimate of 81 economists surveyed by Bloomberg called for 770,000. An increase in building permits may mean the gains will be sustained.

A pickup in sales stoked by record-low mortgage rates and population growth combined with dwindling supply indicates construction can continue strengthening, contributing more to economic growth. At the same time, the level of starts remains below the pre-recession peak, limiting how much the industry can boost the rate of expansion.

“The housing market certainly has turned,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, whose forecast for 790,000 starts was among the highest. “But we still have a long way to go. The good thing is that construction will pull employment with it.”

 See the full housing starts report.

 

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