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October 17, 2012

Housing starts surge to highest pace in four years

by Central Coast Lending

September housing starts rose 34.8 percent from the previous year and 15 percent from August to settle at a 0.872 million unit pace, the highest level in four years. The pace significantly topped market expectations. The West (20.1 percent), South (19.9 percent), and Midwest (6.7 percent) all posted gains, while the Northeast (5.1 percent) dipped in activity.

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[Related: The difficulty with new home construction and development]

Single-family starts rose 11 percent, while the multifamily component jumped 25 percent.

Housing permits, meanwhile, rose 11.6 percent from the previous month and 45.1 percent from the previous year for a pace of 0.894 million units.

At the peak of the housing boom in January 2006, housing starts hit a 2.27 million annualized pace.

Economists estimate that residential construction accounts for 2.5 percent of GDP and that each new house built correlated to three new jobs.


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