Housing Becomes Economic Factor Again

Groundbreaking to build new homes accelerated in December to
its fastest pace in over four years, supporting the view that housing is poised
to provide a substantial boost to the U.S. economy. 

The Commerce Department said on Thursday that starts at
building sites for homes surged 12.1 percent last month to a 954,000-unit
annual rate. 

Data for U.S.
housing starts can be volatile and is sometimes subject to large revisions. The
government revised downward its estimate for November housing starts to a
851,000-unit rate from the originally reported 861,000. 

“Housing is definitely a pocket of strength. It’s not
only on the back on the bounce from hurricane Sandy. This was broad-based,” said
Yelena Shulyatyeva, U.S.
economist at BNP Paribas.

Some of the strength in December’s reading for starts came
from a 20.3 percent surge in multi-family unit construction. That component is
especially volatile. This is one market that modular construction can be more than a 3% contributor!

Wednesday’s report nonetheless builds on a trend in growth
that has led many analysts to expect residential construction boosted the
economy last year for the first time since 2005.