To say construction firms, whether seeking credit or providing it on products that go into building, have been desperate for consistent good news would be an understatement given the depths of the industry’s fall during the recession and slow rise since. This week brought the best batch of news in some time.
Within the last week, there has been positive news related to the residential real estate/construction industry from three very different sources: a government agency, a joint study produced by trade association and financial institution and a publicly-traded company’s earnings statement. It kicked off with news from the Commerce Department reporting that new, residential housing starts increased by more than 15% in July.
A monthly index compiled by the National Association of Home Builders and Well Fargo focused on homebuilder confidence landed at a level of 55 in August, up two points from the previous month. That marks the second best level in seven months, with fewer threatening seasonal concerns ahead than were apparent during the year’s harsh first quarter.
Finally, Home Depot unveiled earnings this week that soundly beat market estimates. Company officials pointed to residential real estate, both new home construction and existing home renovation, as an impetus for the surge. Officials also predicted during the earnings call that revenues and profits would escalate at an even better pace during a majority of 2014’s second half because of this area. Given where housing has been since 2007, it’s not every week that such a rush of positive news comes in all at once.
- Brian Shappell, CBA, CICP, NACM staff writer