A StuartCo apartment complex under construction at 8055 Penn Av. in Bloomington: Rental units still dominate the metro market.
Joel Koyama, Star Tribune
Sweet home data from February
- Article by: JIM BUCHTA
- Star Tribune
- March 20, 2012 - 11:18 PM
A continuing apartment boom helped boost construction activity across the country last month, giving builders optimism that the worst of the downturn is over.
The U.S. Commerce Department said Tuesday that builders broke ground on 698,000 homes based on a seasonally adjusted annual rate. That was down 1 percent from January, but up 35 percent from a year ago.
Multifamily units jumped 85 percent compared with this time last year, while single-family home starts dropped almost 10 percent.
But permits, a bellwether of future construction, offered hope for the languishing single-family home segment. About two-thirds of the 717,000 permits issued during the month were for detached houses, an indication that demand may finally be on the upswing.
Mattamy Homes, a national builder with operations in the Twin Cities, reported more sales of new homes in February than any month since the company launched its U.S. operations in 2004.
"This year is shaping up to be our busiest one ever," said Steve Parker, the company's U.S. president.
Mattamy said it sold 20 homes in Minnesota last month.
The Commerce Department doesn't report permit or construction data at the state level, but data from the Builders Association of the Twin Cities show that rental units continue to dominate the metro market. According to the association, 179 permits were issued in the Twin Cities to build 491 units during February.
In the metro area, single-family home construction so far this year remains near historic lows but has stabilized. Builders were issued enough permits to build 346 units in January and February compared with 370 during the same period in 2011.
These improvements in construction aren't just a seasonal aberration brought on by unusually mild weather; nationwide starts were up for five consecutive months through January, rising to the highest level since October 2008. That trend has been a boost for builder confidence; the builder sentiment index hasn't been higher since June 2007.
A report from the research department at Deutsche Bank attributes recent improvements in the housing market to general improvements in the economy, namely an improving labor market.
Already, higher construction activity is producing more jobs in Minnesota. On Tuesday, the Minnesota Housing Partnership said that the third quarter of last year was the first in six years in which the number of Minnesota construction jobs showed an annual increase, according to data from the Minnesota Department of Employment and Economic Development.
Jim Buchta • 612-673-7376
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