U.S. home construction rebounds in April

5/17/2016 (Permalink)

 Construction on new houses rebounded in April after a sharp dip in the prior month, but a slowdown in building permits suggest work on new properties could taper off from last year’s double-digit pace.

Housing starts climbed 6.6% last month to an annual pace of 1.17 million, the Commerce Department said Tuesday. In March, starts were revised to a 1.1 million rate.

Housing has been one of the economy’s strongest sectors of growth over the past few years, but sales and construction are not growing as fast in early 2016 as they did in 2015. Starts surged by more than 10% last year.

Permits for new construction, a sign of future demand, might offer another clue. They rose slightly to an annual rate of 1.12 million in April, but they are running 5.3% below year-ago levels.

Rising prices may be scaring buyers off and construction companies complain about a shortage of skilled workers, a growing problem that could limit supply and keep prices at elevated levels.

Most economists expect activity to pick up as the prime buying season gets underway, but there are still lingering questions of just how fast. Steve Blitz, chief economist of ITG Investment Research, said there’s little evidence “to suggest a great surge in construction is upon us.”

In April, new construction sped up in the Midwest and South and declined in the Northeast and West, the government said.

Construction on apartments, condos and other buildings with at least five units surged 10.7%. Single-family home starts advanced a smaller 3.3%, though the South posted the biggest increase since the end of 2007.

Source: http://www.marketwatch.com/story/us-housing-starts-climb-66-in-april-2016-05-17