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Rising Construction of Single Family Homes - 9/2/15

It is a piece of very good and important news for the U.S. economy – home builders began construction on single family homes at the fastest pace since the recession began in late two thousand and seven.  The U.S. economy has continued to struggle to expand robustly in recent months.  Increased consumer spending has sustained much of the growth that has occurred.  There has been a dearth of other significant economic drivers to emerge. 

Home construction’s momentum is therefore of disproportionate importance.  Total housing starts have expanded by eleven point three percent year-to-date through July, with both apartment construction and single family construction manifesting momentum.  Housing starts expanded in July to a seasonally adjusted annual rate of one point two million homes. 

Some analysts indicate that starts in the range of one point five million on an annualized basis would be an indication of a truly robust economy.  Unfortunately, the newfound momentum might not last.  Approved building permits, a leading indicator of construction, slipped in July after hitting an eight year high in June.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.