New building permits hit highest level since 2008
Construction workers build new homes at a new housing development in Petaluma, Calif. The Census Bureau reported a rise in building permits, signaling a comeback in the housing market, according to some economists.
The number of new homes builders broke ground on fell last month according to a report from the Census Bureau. But building permits rose to their highest level since 2008. We speak with Michele Myer, Senior Economist at Bank of America, Merril Lynch, about those numbers.
Myer says the news is "pretty much in line with expectations. It's showing that there are signs of life and recovery in the housing market. It's just happening very slowly."
A lot of the new homes being built right now are multi-family, which means they will probably end up being rental homes. Myer says that fact is the most crucial takeaway out of some of the statistics we're seeing right now.
"There is a changing dynamic in the housing market, where people are shifting from home ownership to renting, in part because of all the foreclosures that are transitioning people out of home ownership," says Myer. "There is simply not enough rental supply in the market. That has helped to generate an increase in multi-family construction, which is being built for rental purposes."
It's a trend Myer thinks will persist. For more from this interview, click on the audio player above.