Over the past 18 months, housing prices have retreated sharply from the highs reached at the end of the housing boom. However, there are reasons to believe that one of the longest and most severe housing slumps ever is nearing an end. Building permits recently increased to a 584,000 yearly pace, well above the forecasted 570,000 and the highest level since November 2008. Construction of single-family houses, which accounted for 84% of the industry last month, increased 2.1% to an annual rate of 482,000, while work on multifamily homes jumped 67% to an annual rate of 92,000. And most recently, home sales for November surged 7.4% over the previous month, reaching the highest level since February 2007 on a seasonally-adjusted basis.
On the high-end side of the market, Robert Toll, CEO of luxury home giant Toll Brothers said during a Bloomberg Television interview on Dec. 11. that “there is a pretty good reservoir of pent-up demand, we don’t know how fast we’re coming back, but we do know we’re coming back.” The company also recently reported a 42% surge in fiscal fourth-quarter orders, suggesting that demand is beginning to come back for luxury homes as well. The increase has not been limited to any one particular area of the country either: gains were recorded in all four regions of the country in November.
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