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May 27, 2010

STARTS OF NEW HOMES WERE UP IN APRIL
Nationally, new home building starts were up by 5.8 percent this past April at a yearly rate of six hundred seventy-two thousand units. These figures represent an increase of 40.9 percent over April of 2009, and single family home starts increased by 10.2 percent.

Construction of single family homes is up from December, 2009 through March of 2010 to 53.6 percent over the same period a year ago. This four-month long upward trend has not happened since 2005. While new single family home starts went down a bit during this past April, permits for them are 16 percent higher than April of 2009.

The issuance of new building permits was down by 11.5 percent during last month at an annual rate of six hundred six thousand. It is possible that these statistics represent builders' reaction to the cessation of the Federal Tax Credit for home purchasers. That said, the Home Builders' Confidence Index reached a thirty-three month high this month, and it does appear as if housing may well have begun to turn around, with the price of homes possibly rebounding by the beginning of 2011.

Some analysts project prices going up approximately 12 percent by the beginning of 2015, while some believe that they will increase by up to 37 percent. While a large supply of homes may be available in areas that are having economic difficulties or are geographically isolated, this will not be an issue for the majority of purchasers who will continue to buy in the more desirable areas, thus driving up prices.