Salient to Investors:

The share of yet-to-be-built dwellings was 36 percent in May versus 26 percent a year ago and versus 14 percent in September 2008.

Neil Dutta at Renaissance Macro Research said there is clearly more housing starts activity in the pipeline, while the economic outlook is improving and there is more household formation – residential investment’s contribution to GDP may expand to as much as 0.6 percent versus an average of 0.1 point since the recession ended in June 2009. Dutta said the recovery also will be able to withstand the recent run-up in borrowing costs as credit conditions are easing.

The proportion of consumers who consider selling conditions favorable is the highest since 2006, while the share saying it’s a bad time to buy a house is the smallest in 10 years.

David Crowe at the NAHB expects starts on single-family homes to rise 25 percent in 2013, the same as in 2012, and since each new house built creates 3 jobs, will generate 450,000 additional jobs.

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