Despite the fact that the homebuilding market increased less in May than expected, construction industry analysts are buoyed by an influx of permit requests that they say bode well for the construction industry going forward. According to an article in CNBC, new home construction permits rose by 14.4 percent to and, at the same time, home loan applications soared to their highest level in more than 11 years.
For construction firms and the economy in general, it is good news. “Signs of recovery in the housing market were underscored by a survey of Tuesday showing single-family homebuilders very upbeat in June about conditions in the industry,” the article says, adding, “Builders reported increased demand for single-family homes in lower density neighborhoods.” Among the increase in permits, single-family building permits rose by 11.9 percent and multi-family units rose by 18.8 percent.
Accounting for three percent of the gross domestic product, the housing market is considered by economists to be on the front line of recovery from a recession, though not all regions are benefiting equally from this boon in building projects. According to CNBC, homebuilding numbers fell in the Midwest and South, while it climbed in the West and Northeast.
Economists are advising fiscal caution, however, as the COVID-19 pandemic has and will continue to leave millions upon millions of people without a paycheck. Mass unemployment means there is a limit to how much the marketplace can grow right now, and economists are speculating that it could take upwards of a decade for the economy to fully recover.