Home Building Picking Up in CA Too

California's home building business is picking up steam, too. Builders pulled 39% more permits in March compared to February, a jump in activity the California Building Industry Association is taking as a clear sign the combined federal-state tax credits are working to clear out unsold inventory and generate new construction. Though housing starts still are down on a year-over-year basis by 31%, CBIA President Robert Rivinius said the big month-to-month increase shows that builders are gaining confidence due to increased sales generated by the tax credits. In addition to the $8,000 tax credit offered to first-time buyers by Uncle Sam, the state is offering up to a $10,000 credit to buyers of finished but unsold new houses. The state has earmarked $100 million for its credit, and the Franchise Tax Board says one-third was applied for in the first six weeks after it was approved by lawmakers in Sacramento. "It's having the desired effect," said Mr. Rivinius. "But the allocated funds for the credit are being rapidly absorbed, which is why we believe a second round of the tax credit would be extremely helpful in keeping the momentum going."