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New home construction highest since 2008

Home construction is up, but we need twice as much new construction than we're seeing now to get back to a normal housing market.

Kai Ryssdal: Glad to have you here. Gladder still to at long last be able to deliver some good housing news. Homebuilders are feeling pretty good about things, which is a distinct change of direction for their mood.

We learned this morning builders broke ground on more homes last month than they have in any month since 2008. However -- and don't tell me you didn't know this was coming -- when you fall as far as the U.S. housing market has fallen, you're climbing out of a very deep hole.

Marketplace's Shereen Marisol Meraji has more.


Shereen Marisol Meraji: Stephen Paul is the executive vice president of Mid-Atlantic Builders. He says things have been looking up for his company, since March.

Stephen Paul: Probably the best four months of sales that we've seen in several years.

But Paul is quick to point out that business has been so miserable -- for so long -- it's difficult to feel better.

Paul: It's sort of like when you've been sick or you have a really bad headache and slowly it goes away and then you realize, 'oh I don't have a headache anymore.'

He thinks the housing crisis headache is going away -- he's even hired a couple of college grads to prepare for a boom next spring.

Stuart Gabriel: Shereen, this is good news, indeed. Housing is coming back.

That's Stuart Gabriel. He's the director of UCLA's Ziman Center for Real Estate.

Gabriel: But, please bear in mind this so-called recovery to housing, it's muted and it's late.

Late, because housing is usually the first thing to bounce back after an economic slump. Muted, because we need twice as much new construction than we're seeing now to get back to a normal housing market.

Not the out-of-whack market we saw during the bubble where two million new homes were built each year -- but a normal one -- around one and a half million new homes.

Robert Van Order's a professor of real estate and economics at George Washington University. He's surprised the housing start numbers aren't higher. Van Order blames banks for not lending enough to future home buyers and says Americans are still worried about where the economy's headed.

Robert Van Order: Buying a house is a bet on the future and when people are uncertain of the future they're reluctant to. So, we had a better market than we did a month ago, and a significantly better market then we did a year ago, but we still don't have a very good market.

I'm Shereen Marisol Meraji for Marketplace.

About the author

Shereen Marisol Meraji is a reporter for Marketplace’s Wealth & Poverty Desk.
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