Economic recovery in New England

from the National Association of Home Builders:

April 16, 2010 – Nationwide housing starts rose for a third consecutive month in March to a seasonally adjusted annual rate of 626,000 units from an upwardly revised February number, according to figures released today by the U.S. Commerce Department. The rate of permit issuance for new housing construction also rose by a solid 7.5 percent in the month, to a seasonally adjusted annual rate of 685,000 units.

“After an uncertain couple of months, home builders are gradually getting back to what they do best as the spring home buying season commences and consumers return to the market,” said Bob Jones, Chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “While we still have a long way to go, today’s numbers are an indication that builders are looking down the road with a bit more optimism.”

“Today’s report is very encouraging, because it signifies that home builders are confident enough to begin work on homes that will very likely be completed after the expiration of the home buyer tax credits,” noted NAHB Chief Economist David Crowe. “The solid gain in permit issuance last month is particularly welcome news, since those numbers are generally a reliable indicator of future building activity. That said, considerable headwinds continue to impede housing’s recovery, including the critical shortage of credit for housing production that is stifling new development in reviving markets.”

I wanted to quote the entire passage, because it is significant. Builders are assuming that the resurgence in the market will survive the end of the homebuyers’ tax credit. Nationally, housing starts rose to their highest level since November 2008.

Locally, we are seeing a spike in home sales activity. It appears that this will continue beyond the April 30th first cutoff for the tax credit. This probably has a lot to do with the employment situation, which is improving in the New England region:

Perhaps most encouraging: The massive layoffs of last year now seem to be a thing of the past.

“Most New England employers are no longer shedding workers, and many are restoring recession-induced cuts in wages and benefits,” the Fed regional report said.

Anecdotally – and we are conservative in jumping on the “economic trend” bandwagon- we are seeing signs that things are improving locally in the Central MA area. Real estate residential resale, and now new construction sales, are making gains. That’s good for everyone.

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