The U.S. housing sector received a much-needed shot in the arm this week, as data revealed builders began work on new homes last month at the fastest pace in 4 1/2 years.
According to the Commerce Department, builders broke ground on houses and apartments in December at a seasonally adjusted annual clip of 954,000 units. That's up more than 12 percent from November, and it’s nearly twice the amount of activity reported at the depths of the recession in 2009.
Construction of single-family homes -- which account for two-thirds of the U.S. housing market – increased 8 percent month-over-month, and are now 75 percent above the recession low. And applications for building permits, a barometer of future construction, also rose in December to a 4 1/2 year high.
Meanwhile, the Labor Department reports the number of workers seeking initial unemployment benefits fell last week to a five-year low.
Improvements in the labor market and in the housing sector were welcomed on Wall Street, and the Dow and the S&P 500 both settled Friday at 5-year highs.
While signs of recovery in the beleaguered housing sector bode well for the broader economy, the outlook in rural America -- especially as it relates to Mother Nature -- is less optimistic. And this week, multiple reports confirmed that the worst drought in half-a-century is showing NO signs of letting up.
2012 is being remembered as one of the driest and hottest years in U.S. history. The year did set a record for the warmest ever in the continental U.S. with an average temperature of 55.3 degrees, a full degree above the previous all-time high set in 1998.
It also proved to be the driest since 1988 and the 15th driest on record. USDA meteorologist Brad Rippey says 2012 was part of a recent trend of warming temperatures.
Brad Rippey, USDA Meteorologist: “Over the last fifteen years from 1998 to 2012 we have seen seven of the ten warmest U.S. years on record. In addition to 1998 and 2012 we also achieved top ten rankings for warmth in 1999, 2001 and three in a row, 2005, six and seven.”
Rippey adds feedback from the drought was a major reason for the last year’s high temperatures.
Brad Rippey, USDA Meteorologist: “By the time we got into the late spring and the summer soils were very dry and a lot of the sun’s energy went into heating up the ground and the adjacent air and not into evaporation like you would see in a typical early summer pattern. So as we move through the summer a lot of the sun’s energy went into heating rather than evaporation and that contributed to the hottest month on record in July and that carried on through the rest of the summer.”
While snow covers the ground in much of the Mountain West, a look at Weather Service International’s Snow Cover map reveals a disappearing snow line across much of the Corn Belt.
The latest Drought Monitor from the University of Nebraska reveals portions of the South, Southeast and Midwest did receive some rain this past week.
But nationally, the arid conditions are worsening. According to the University of Nebraska, 70 percent of the nation in some form of drought, up 20 percentage portions from a year ago at this time.
Brad Rippey, USDA Meteorologist: “Fortunately we don’t have La Nina right now and that would a contributor to even more likelihood of a very warm start to 2013, but I don’t think anybody expects to see a complete repeat of what we saw in 2012 pretty much from January to December warm and dry conditions. But we certainly have a lot drought still left behind and we’re at great risk for another warm and dry year if things continue as we have.