Data shows some demand for new homes

A growing number of consumers may be moving into new homes around the country given rising demand for new construction.

At the same time, data from the Commerce Department showed only a marginal rise in building permits in October, up 0.5 percent from the previous month. Permits generally provide a glimpse into the demand for new homes in the near future, and a rise would indicate that construction activity is going to pick up to meet the relocation needs of more families. The figures were also tempered by a big drop in housing starts, which were down 11.7 percent during October - well below experts' predictions.

Still, in an analysis of the government data, U.S. economist Patrick Newport, of IHS Global Insight, wrote that rising permits were a good sign that housing starts may be rebound in the coming months. He tied the drop in housing starts to a lack of jobs and tight credit standards. Additionally, "Household formation is down because the jobs recession has reduced immigration and led to 'doubling up,'" he said.

Experts say that trend - people moving in with each other and splitting housing costs - has led to a significant reduction in new households around the country. Census data shows that 357,000 households were formed between March 2009 and 2010, well off-pace from earlier this decade, when an average of 1.3 million new households were formed each year.
 

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