As the U.S. economy has started to slow, the housing sector is beginning to contribute more. A report released by the Commerce Department in early July shows that homebuilders broke ground on more new homes in June than in any month in nearly four years.
The report released by the Commerce Department on July 18 shows that the housing sector is showing recovery and contributing more to the GDP while consumer spending, manufacturing, and job growth are all in a slump.
The report also showed that new home construction increased by
6.9% in June when compared the previous month to a seasonally adjusted annual rate of 760,000. The jump was dramatic due to builder cut backs and the building of
new homes in Phoenix, Las Vegas, and Riverside, California, to name a few, sharply during the downturn in housing. Any building now will be a great benefit to builders who are noticing that demand is increasing and supplies of both new and existing homes are dwindling quickly.
The increase in new home construction was a very welcome sight. During the toughest time of the
housing downturn, outbacks on the construction of new homes took off as much as a full percentage point from GDP. This year construction will likely contribute positively.
Housing can still hamper the economic recovery because there are so many homeowners with negative or no equity in their homes. Without equity, consumers are less likely to spend money on home renovations, college tuition, or going on vacation.
