There is more evidence that the economy is not as bad as the national media and "experts" continue to paint it. New Census data shows construction spending grew nationwide over the summer, bucking predictions of a decline. Total construction outlays rose 0.2 percent from July to August, with private sector construction up 0.3 percent for the month, and residential construction up nearly one percent.
The rise in residential construction could bode well for the slow housing market, which has been hampered by a lack of supply. Although a closer look at the numbers shows the increase is driven mostly by multifamily units and improvements to existing homes, with single-family housing construction down by 0.4 percent in August. Still, the rise in multifamily units reverses a negative trend that began two years ago. "At the end of the day, it's build, baby, build," says Texas realtor Cliff Freeman in a recent interview with KTRH. "Building is the only way we are going to get ourselves out of this roughly 4-million nationwide shortage of homes."
In Texas, the numbers are somewhat mixed. According to Home Builders Weekly, new construction permits statewide are down 2% annually in the third quarter. Houston leads the state in permits issued so far this year, but that number is down 5% from last year.
Ultimately, it's not just the economy but government policy that will play a role in boosting construction. "We're seeing local governments trying to do a better job of letting builders build," says Jim Tobin, president of the National Association of Home Builders in an interview with Fox News. "Which means lowering permitting fees, speeding up permitting times, opening up more land for building."
"So there is a trend ahead of us, we just need to weather this little bit of uncertainty in the short term, and hopefully we'll take off in the next few quarters."
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