Wednesday, May 23, 2012

Housing Starts Post New Gains, Signs of Healing

Builders broke ground on more homes last month as housing starts jumped 2.6 percent nationwide in April over March, the Commerce Department reported this week. The single-family sector saw a 3 percent increase in housing starts in April, while multifamily construction projects saw a 3.2 percent rise. "April's increase in housing production comes on top of strong upward revisions to the previous month's data, and is an encouraging sign that we are returning to a gradual, upward trend that should continue in the year ahead as builders respond to improving demand for new homes in certain markets," Barry Rutenberg, chairman of the National Association of Home Builders, said in a statement. "Unfortunately, overly restrictive lending conditions for builders and buyers are slowing the pace of this trend considerably." Regionally, housing starts were mixed. The Midwest and South saw some of the biggest gains in housing starts in April, with the South surging 11.6 percent and 6.7 percent in the Midwest. Meanwhile, the Northeast saw housing starts in April drop 20.7 percent, and by 8.1 percent in the West. While the new-home sector has seen recent gains, the rate of production is still half of what is considered healthy for a normal market. Housing permits — a future gauge of home building — dropped 7 percent in April, mostly attributed to a slide in multifamily permits, which dropped 20.8 percent last month. Meanwhile, single-family permits increased 1.9 percent in April. Last month, building permits posted a three-and-a-half-year high mostly from a surge in permits for apartment construction. Source: National Association of Home Builders and “Housing Starts, Industrial Production Both Rise in April,” Associated Press (May 16, 2012)

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