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US Sales of yet-to-be-built US homes surge

Property Here - Thursday, July 04, 2013

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Of the 45,000 new US homes sold in May, 16,000 have yet to start construction, according to data from the Commerce Department.
 
This comprises 36 percent of all new US homes sold for that month, up from 26 percent in 2012, 14 percent in September 2008 and the highest percentage in nearly seven years. 
 
For instance, Joe Chamberlain, founder of home builder Caprock Custom Construction Inc in Rockwall, Texas has not started building the properties he sold in the last two months. 
 
That is “an excellent position for a builder to be in” as it ensures profit, Chamberlain explained.
 
It is also a sign of good demand and would force home builders to ramp up construction. It could also trigger the purchase of several items like lumber, cement and appliances, resulting in more hires and economic growth, noted Neil Dutta, Head of US economics at New York-based Renaissance Macro Research LLC.
 
“There’s clearly more housing starts activity in the pipeline.”
 
“The economic outlook is getting better and there’s more household formation. With demand rising, production is going to follow,” he added.



Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@allproperty.com.sg