Housing Construction Reaches Highest Level Since 2008

A 15-percent surge helped housing starts in America reach a four-year high last month. The figure indicates that the housing market—the issue at the center of the financial crisis—may be on the road to recovery.

Starts jumped to a 872,000 annual rate last month, the most since July 2008 and exceeding all forecasts in a Bloomberg survey of economists, Commerce Department figures showed today in Washington. The median estimate of 81 economists surveyed by Bloomberg called for 770,000. An increase in building permits may mean the gains will be sustained.

Additionally, work began on 34.8 percent more homes over the past 12 months, which is good for the biggest year-over-year increase since April.

The brighter building environment has made construction companies less pessimistic. The National Association of Home Builders/Wells Fargo builder sentiment index increased to 41 this month, the highest since June 2006 and the sixth-straight gain, figures showed yesterday. [Businessweek]