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US home construction rises 6.8 percent in May

Published on NewsOK Modified: June 18, 2013 at 8:43 am •  Published: June 18, 2013
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A better outlook for housing has made builders more optimistic, leading to more construction and jobs. The National Association of Home Builders/Wells Fargo builder sentiment index released Monday rose to 52 this month, up from 44 in May. That was the highest reading in seven years and the largest monthly increase in more than a decade.

A reading above 50 indicates more builders view sales conditions as good, rather than poor.

Still, some markets are recovering faster than others. In May, housing starts rose 17.8 percent in the South and 5.7 percent in the West. But they fell 13.7 percent in the Midwest and 9 percent in the Northeast.

Many of the nation's major homebuilders have reported strong annual growth in sales during the spring home-selling season. The increased demand has paved the way for builders to raise prices and ramp up construction of more homes, despite lingering concerns over rising costs for land, building materials and labor.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB statistics.