Recently released housing market figures all signal a promisingtrend: the development and construction industries are truly on theup.

The latest US Census Bureau/Department of Housing and UrbanDevelopment report for New Residential Construction showedthat building permits have surged for both single family andmultifamily units in the last few months. Home buildingpermits reached the highest level in more than 5 years in October(to an annual rate of 1.03 million), while applications formultifamily permits rose by more than 15 in the same month and byno less than 20.1% in September. Figures for housing startsand completions were postponed until December 18 as a result of thegovernment shutdown, but I expect these to show a similar upwardtrend.

As the housing construction market gains strength, lack ofsupply also continues to boost house prices. In fact, Bloombergreported last week that property values in the 3^rdquarter of this year enjoyed their sharpest rise in more than 7years. And the latest S&P/Case-Shiller Home PriceIndices, which are the leading measures of U.S. residential realestate values, also showed significant improvements over the lastyear. The composite index of 20 metropolitan areas increasedby 13.3 percent in September from a year ago, which is the biggestjump since early 2006.