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WASHINGTON (AP) â¿¿ The aftermath of the housing bust forced many homebuilders to dramatically scale back construction on new homes to avoid the risk of ending up saddled with a trove of newly built, yet unsold properties.
But an improving housing market has homebuilders feeling more confident about sales, and that's likely to kick the pace of new construction into a higher gear this year.
The Commerce Department said Thursday that builders broke ground on houses and apartments last month at a seasonally adjusted annual rate of 954,000. That's 12.1 percent higher than November's annual rate. And it is nearly double the recession low reached in April 2009.
Construction increased last month for both single-family homes and apartments. And the pace in which builders requested permits to start more homes ticked up to a 4Â½ year high.
For the year, builders started work on 780,000 homes. That's still roughly half of the annual number of starts consistent with healthier markets. But it is an increase of 28.1 percent from 2011. And it is the most since 2008 â¿¿ shortly after the housing market began to collapse in late 2006 and 2007.
Steady hiring, record-low mortgage rates and a tight supply of new and previously occupied homes available for sale have helped boost sales and prices in most markets. That has persuaded builders to start more homes, which adds to economic growth and hiring.
David Williams, a homebuilding analyst with Williams Financial Group, says builders are very closely tied to what's happening in the housing market and they're going to build homes to meet demand, but not go overboard.
"I don't think, at this point, that they're going to overbuild," Williams said, noting that homebuilders are still holding back on building too many spec homes, or properties built before they're sold.