New home construction has rebounded to levels not seen since the depths of the financial crisis, according to new government data, as what had once been a major drag on the economy now appears to be a bright spot.
The Census Bureau reported Thursday that new home construction rose 28 percent in 2012. That was capped by a roaring December in which the building of homes reached an annualized pace of 954,000.
And more new houses are on the way: Builders received permits for more than 800,000 units last year, up 30 percent from the previous year, government data shows.
“We think the recovery is real this time,” said Scott Anderson, chief economist for Bank of the West and head of the economic advisory committee of the American Bankers Association (ABA). “One of the bright spots in our forecast is the housing market. These are very strong numbers.”
The group said Thursday that it anticipates home prices will rise 4.3 percent this year, driven by rock-bottom mortgage rates, the tight supply of homes on the market and growing consumer confidence. A turnaround in housing is particularly significant because the sector was at the root of the nation’s financial crisis. Its return signals that a fundamental flaw in the economy may have been fixed.