More homes are now being built in the US in June as there are several states who are starting to ease restrictions brought about by the pandemic. CNBC reports that the rise in construction of homes reach 17.3 percent. However, it still does not match when compared to last year’s likely due to the pandemic.
More new homes
It was reported by the Commerce Department that new homes are being built during a seasonally adjusted annual rate of 1,186,000 last month. This came as May starts to see a rise in construction activity after plummeting when the pandemic began on March and April. Bloomberg mentioned that this increase is the largest jump between months since four years ago.
However, it is still 4 percent lower than the density of construction from last year at the same timeframe, as per the government report released Friday.
More building permit applications
CNBC noted that the increase in building permit applications could indicate the future for the construction industry. There is a rise in applications to build by 2.1 percent, which totals to over 1 million units. The report from the department further shows increase in single-family starts, which is 17 percent higher than the previous month.
This comeback could also be caused by a decrease in mortgage rates, which encouraged many Americans to apply for loans to buy houses.
Path to recovery?
According to US property economist Matthew Pointon, the pandemic has also pushed people to purchase a new home rather than opting for an older one that could possibly be contaminated by the coronavirus.
“Homebuilders will be keen to ramp up production—their confidence has already bounced back from the dip,” shared Pointon.
Home builders are actually hoping that the housing market could still improve following a low when the outbreak reached the US. The health crisis affected the real estate market bringing down the number of construction activity. And the future of the construction industry could still be affected by the shaky economy with a pandemic in the backdrop. It is feared that as many are out of jobs during these times, it could be a potential blow to the building market.