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New Home Sales Stay Strong Following a substantial gain in July, the pace of new-home sales held vir- tually unchanged at a seasonally ad- justed annual rate of 373,000 units in August, according to newly released figures from HUD and the U.S. Census Bureau. "New-home sales in August effec- tively tied the pace they set in the previous month, when they were the strongest we've seen in more than two years – so this is really a continu- ation of the good news we've been getting on the housing front," said Barry Rutenberg, chairman of the Na- tional Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "Looking at the big picture, sales have been trending gradually upward since the middle of last year as favorable interest rates and prices have driven more con- sumers to get back in the market for a newly built home." "This latest report indicates that new- home sales continue to run at a steady pace that's well ahead of what we were seeing this time last year, and at this rate, the third quarter of 2012 is going to be well ahead of the second quarter," noted NAHB Chief Economist David Crowe. "That said, the razor-thin inventory of new homes for sale is very concerning be- cause it indicates that builders aren't able to access the credit they need to build new homes as demand for them improves." Crowe also observed that the share of new homes sold in the higher price ranges ($400,000 and above) rose significantly in August. "This re- flects the fact that people who are able to buy homes right now are those in higher-income ranges who have cash and equity on hand, while first-time buyers are having a tougher time getting qualified for a mortgage," he said. Regionally, new-home sales gained in all but one area of the country this August, with the Northeast, Midwest and West posting increases of 20 percent, 1.8 percent and 0.9 percent, respectively. The South was the only region to post a decline of 4.9 percent. www.rockproducts.com clines of the previous three months, electric utility construction in August surged 103 percent. The public works categories in August included gains for two project types – bridges, up 28 percent; and "other public works" (which includes pipelines, mass transit, and site work), up 19 percent. In contrast, weaker activity in August was reported for the remaining pub‐ lic works categories – sewer systems, down 2 percent; streets and high‐ ways, down 4 percent; water supply systems, down 10 percent; and river/harbor development, down 51 percent. The 3 percent rise for total construc‐ tion starts on an unadjusted basis during the first eight months of 2012 reflected greater activity for two of the three main construction groups. Residential building advanced 25 percent, with both its single family and multifamily segments increasing by that percentage amount. Non‐ building construction grew 3 percent year‐to‐date, as a 17 percent gain for electric utilities outweighed a 2 per‐ cent drop for public works. Nonresi‐ dential building year‐to‐date ran counter to the other two main con‐ struction groups, sliding 13 percent. The nonresidential building decline was due to this pattern by segment – commercial building, down 2 per‐ cent; institutional building, down 17 percent; and manufacturing building, down 30 percent. The year‐to‐date decline for nonresi‐ dential building has been getting smaller as 2012 has proceeded, al‐ though it still reflects the comparison to the same period a year ago which included such projects as a $1.5 bil‐ lion semiconductor plant in Arizona, the $1.2 billion redevelopment of the Delta Terminal at New York's JFK In‐ ternational Airport, and the $1.1 bil‐ lion National Security Agency data center in Utah. By region, total construction starts during the first eight months of 2012 featured a large gain for the South Atlantic, up 37 percent, with much of the boost coming from the start of two massive nuclear power projects in Georgia and South Car‐ olina. Total construction starts in the Midwest were up 5 percent year‐to‐date, but declines were re‐ ported for the West and Northeast, each down 7 percent; and the South Central, down 8 percent. E Monthly Construction Starts Nonresidential Building $147,682 Residential Building Nonbuilding Construction $117,329 Total Construction (Seasonally Adjusted Annual Rates, In Millions of Dollars) August 2012 July 2012 $168,885 $433,896 $138,450 $155,128 $108,692 $402,270 Year-to-Date Construction Starts (Seasonally Adjusted Annual Rates, In Millions of Dollars) Nonresidential Building $96,626 Residential Building Nonbuilding Construction $103,367 Total Construction 8 Mos. 2012 $104,529 $304,522 8 Mos. 2011 % Change $111,696 $83,367 $100,010 $295,073 -13 +25 +3 +3 ROCKproducts • OCTOBER 2012 39 % Change +7 +9 +8 +8