Steady comeback for new homes
WASHINGTON (AP) -- Buil d ers are putting up more new houses than they have in nearly four years, a long-awaited recovery that could help energize the U.S. economy.
From areas like Phoenix that are finally arising from the housing bust to Chicago and Minn eapolis, where strong economies have lifted demand, the outlook for home building looks healthier than at any time since sales and prices collapsed in 2007.
"We've been hoping for this for a long time," said Celia Chen, a housing economist at Moody's Analytics. "It looks like things are turning."
The improvement has been gradual. But builders are responding to interest from buyers, who are drawn by reduced prices, record-low mortgage rates and rising rents. And the supply of new homes has shrunk to near-record lows.
The increased construction coincides with rising sales, prices, builder confidence and stock prices for homebuilder companies. The stocks of the 13 U.S. builders whose shares are publicly traded have increased an average 60 percent this year. By contrast, the Standard & Poor's 500 stock index is up about 9 percent.
Last month, U.S. builders broke ground on the most homes in nearly four years. Single-family home building -- the bulk of the market -- rose for a fourth straight month. Permits to build single-family homes reached their highest point since March 2010.
The news helped boost stock prices Wednesday. The Dow Jones industrial average rose 87 points in afternoon trading. And homebuilders' stocks KB Home and Hovnanian Ent er prises both gained nearly 1 percent.
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