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New home construction increases sharply in December

January 17, 2013|By Alejandro Lazo
  • Workers build a home in Rancho Santa Fe.
Workers build a home in Rancho Santa Fe. (Sam Hodgson / Bloomberg )

Construction of new residential buildings saw a sharp increase in December, driven largely by work begun on new apartments.

The Commerce Department reported that builders started on new housing at a seasonally adjusted annual rate of 954,000 units, up 12.1% from November and up 36.9% from December 2011.

Although construction became a part of the housing recovery last year, it hasn’t made a significant contribution to the hiring picture, Jed Kolko, chief economist for real estate website Trulia.com, wrote in an e-mailed analysis.

Video: Experts discuss Southern California's housing market

“The construction rebound hasn’t created new construction jobs,” Kolko wrote. “In 2012 builders bet on local markets with strong job growth and low vacancy rates, not markets experiencing a big price bounce-back.”

Builders began work on 780,000 homes last year -- up 28.1% from 2011, when new home construction hit a record low, and the most since 2008. But the number of starts last year was still sluggish compared with historical standards, economists noted.

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