During the recession, builders were struggling to keep their hammers and nails busy, as there was little to no need for new homes. Finally, the time has come for them to get back on track; almost 36 percent of all U.S. new homes sold in May weren’t yet under construction, close to a seven-year high. According to economist Neil Dutta, the growth in the homebulding sector also influences the aspects of the economy with increased purchase of everything from cement and lumber to furniture and appliances.
“There’s clearly more housing starts activity in the pipeline,” said Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. “The economic outlook is getting better and there’s more household formation. With demand rising, production is going to follow.”
The outlook for housing has helped drive the Standard & Poor’s Homebuilding Index up 29 percent in the past year, outpacing the S&P 500 Index’s 18 percent gain. The S&P 500 fell 0.1 percent today to close at 1614.08 in New York.