Housing Gets a Boost as Construction, Permits Rise Sharply

Residential Construction Ahead Of Housing Starts Data
Luke Sharrett/Bloomberg via Getty ImagesResidential housing under construction in Louisville, Ky.
By Lucia Mutikani

WASHINGTON -- U.S. housing starts jumped in April and building permits hit their highest level in nearly six years, offering hope that the troubled housing market could be stabilizing.

The Commerce Department said Friday groundbreaking increased 13.2 percent to a seasonally adjusted annual pace of 1.07 million units, the highest level since November 2013. All four regions of the country reported increases.

Starts rose by a revised 2 percent in March, compared to a previously reported 2.8 percent gain for that month.

Economists polled by Reuters had forecast starts rising to a 980,000-unit rate last month. Compared to April last year, groundbreaking was up 26.4 percent.

The dollar pared losses against the yen, while U.S. Treasury debt yields rose after the data.

The housing market recovery stalled as a combination of higher mortgage rates and rising property prices, against the backdrop of stagnant wage growth, made housing less affordable for many Americans. A cold winter also weighed on activity.

The residential sector contracted in the first three months of 2014, declining for a second consecutive quarter.

With the multifamily sector segment continuing to drive residential construction, housing is unlikely to contribute to economic growth this year for the first time since 2010.

The weak housing market recently has caught the attention of U.S. Federal Reserve Chair Janet Yellen, who early this month told lawmakers that it could undermine the economy.

Last month, groundbreaking for single-family homes, the largest segment of the market, rose 0.8 percent to a 649,000-unit pace. Starts for the volatile multifamily homes segment surged 39.6 percent to a 423,000-unit rate.

Groundbreaking for buildings with five or more units hit the highest level since January 2006.

Permits to build homes jumped 8 percent to a 1.08-million unit pace in April, the highest since June 2008. Economists had expected permits to rise to a 1.01-million unit pace. Compared to April last year, permits were up 3.8 percent.

Permits for single-family homes rose 0.3 percent to a 602,000-unit pace.

Single-family homes permits continue to lag groundbreaking, suggesting that single-family starts could decline in the months ahead to bring them in line with permits.

A survey released Thursday showed confidence among single-family homebuilders slipped to a one-year low in May.

Permits for multifamily homes soared 19.5 percent to a 478,000-unit rate in April. Multifamily permits are running well ahead of starts, which could indicate delays in getting projects started. Permits for buildings with five or more units jumped 21.8 percent to their highest level since June 2008.

The multifamily segment is being driven by demand for rental units. Builders, however, have complained about rising material costs as well as shortages of lots and skilled labor.


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militiaman2013

And the Banks are back to their old tricks already, nobody can qualify for a mortgage so their gonna ease the qualifications and let people who can't afford a mortgage have one but it's ok because the Bankers will get their commissions up front and when the buyers default the Bankers will get more FED hand outs.

May 16 2014 at 6:35 PM Report abuse +2 rate up rate down Reply
1 reply to militiaman2013's comment
dopey.obamite

So buy your house outright and quit crying.

May 16 2014 at 6:38 PM Report abuse -1 rate up rate down Reply
1 reply to dopey.obamite's comment
militiaman2013

Thanks Dopey your support is overwhelming and your stalking is a bit creepy...

May 16 2014 at 9:51 PM Report abuse +2 rate up rate down
militiaman2013

Yeah tell that to the 115,000 families the Banks foreclosed on last month alone.

But Wall Street needed an excuse to pump their phony market back up and now they got it.

May 16 2014 at 6:32 PM Report abuse +2 rate up rate down Reply
1 reply to militiaman2013's comment
dopey.obamite

but you beat em, dintcha, 3 minute man?

May 16 2014 at 6:38 PM Report abuse -1 rate up rate down Reply
1 reply to dopey.obamite's comment
militiaman2013

You should have been there - pre market WWE (Fake Time Wrestling) gets hit by the media blitz and the stock drops from $20 to $9.97 in less than 3 minutes. Then the market opens up and Bam the stock goes to $11.62 and profit is made. You should try it, it's very rewarding taking form the 1%.

May 16 2014 at 9:54 PM Report abuse +2 rate up rate down
createidea

WASHINGTON -- U.S. housing starts jumped in April and building permits hit their highest level in nearly six years...

LOL !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Yeah, right.

May 16 2014 at 9:51 AM Report abuse +3 rate up rate down Reply