Advertisement
Business

New-home construction soars in April, beats expectations

New homes
Site superintendent Grant Cooksey of the Ramage construction company inspects a work site in Louisville, Ky.
(Luke Sharrett / Bloomberg)

Builders ramped up construction of new homes in April, providing a jolt to a slowing housing market and the broader economic recovery.

Housing starts jumped 13.2% from March to a seasonally adjusted annual rate of 1,072,000 -- the highest since November, the Commerce Department reported Friday. The gain surpassed analysts’ expectations and came largely from the more volatile multi-family sector.

Economists polled by Bloomberg News had expected a rate of about 980,000.

The surge comes as the housing recovery has shown signs of cooling. New construction has been muted in recent months, a trend economists blamed partly on severe winter weather across much of the country.

Advertisement

Would-be home buyers have also struggled to afford houses after swift price increases last year locked some out of the market.

Those affordability pressures, along with a shortage of ready-to-build lots, have builders worried. On Thursday, the National Assn. of Home Builders reported builder confidence fell in May to the lowest level in a year.

Still, builders reported growing optimism for future sales. And for the moment, construction has picked up amid warmer weather across the nation.

Housing starts climbed in all regions. In the West, a major home-building region, starts climbed 11.1% from March.

Advertisement

Nationally, builders started new single-family homes at a 0.8% faster rate compared with the previous month; much of the gain came from apartment building.

Building permits, a gauge of future construction, jumped 8% nationwide, the Commerce Department said.


Newsletter
Get our weekly California Inc. newsletter
Advertisement