Housing Sector Finally Gaining Some Momentum

There was a solid increase in housing starts and building permits in November. The gains were led by the multifamily sector, driven by rising demand for rental housing as recession-nipped household formation rates begin to show signs of recovery.

This past year ended on a positive note with economic activity continuing to expand at a moderate rate and the housing sector finally gaining some positive momentum after bouncing along the bottom for most of the year.

Largely positive housing news over the past few months suggests the recovery may finally be underway.

The number of metropolitan areas on the NAHB/First American Improving Market Index expanded to 76 in January, a net increase of 35, following similarly solid gains in November and December.

The NAHB/Wells Fargo Housing Market Index of builder confidence in the single-family market has also made steady gains over the past three months, rising seven points since September to a level of 21 in December.

Single-family production, on the other hand, saw little improvement through 2011 and remains at roughly one-third of more normal levels.

- Courtesy of NAHB