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U.S. home construction up after two months of declines

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U.S. home construction nudged up in November after two months of declines.

Builders broke ground last month on a seasonally adjusted 555,000 units, a 3.9-percent rise from October, the Commerce Department reported Thursday.

Even with the gain, housing starts are just 16 percent above the 477,000 unit pace from April 2009 — the lowest point on records dating back to 1959.

And they are down 76 percent from their peak in January 2006, and 45 percent below the 1 million annual rate that analysts say is consistent with a healthy housing market.

Locally, building permits were up 17 percent in the nine-county area, from 222 in November 2009 to 259 in November 2010. That's the first year-over-year monthly rise since June.

Nationally, all the activity last month came from building single-family homes. They increased to a pace of 465,000 units, a 6.9-percent rise from October. Apartment construction fell 9.1 percent, to a unit pace of 90,000.

Housing permits, a barometer of future demand, fell 4 percent, to an annualized rate of 530,000, reflecting weakness in apartment construction. It marked the lowest level in permits since April 2009.

More than a year after the recession ended, the housing market is struggling.

The Federal Reserve on Tuesday cited that as a reason it decided to stick with a $600 billion Treasury bond-buying program intended to bolster the economy.

Americans are trying to repair personal finances battered by the recession. So they aren't in a rush to make big-ticket financial commitments and buy homes. Plus loans are still hard to come by. A wave of home foreclosures is keeping home prices down. That's good for would-be buyers, but not for builders.

The weak housing market is one of the negative forces confronting a slowly improving economy. So is high unemployment, now at 9.8 percent.

Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

U.S. homebuilders remain uneasy about the housing market's prospects in the months ahead, discouraged by weak job growth and millions of foreclosures, the association says. Its monthly reading of builders' sentiment remained unchanged in December at 16.

Builders are anticipating fewer sales in December than most years, says NAHB Chairman Bob Jones, mostly because of competition from sharply discounted foreclosed homes, tighter lending standards and poor overall job growth. December is traditionally one of the slowest times for sales.

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  1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

  2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

  3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

  4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

  5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

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