Housing Posts Surprising Rebound In April

But Growth Spurred By Apartment Construction Expected To Be Temporary

(AP)  Construction of new homes posted the biggest increase in more than two years in April, a rare spot of good news amid the worst downturn in housing in more than two decades.

The Commerce Department reported Friday that housing construction rose by 8.2 percent in April to a seasonally adjusted annual rate of 1.03 million units. Building of single-family homes continued to weaken, however. The growth came from a big jump in apartment construction.

Still, the overall gain represented recovery after a steep slump in March building pushed activity to the slowest pace in 17 years.

The surprising rebound was expected to be temporary given the headwinds builders are confronting, from slumping sales to soaring home foreclosures.

The strength in April came entirely from a huge increase in apartment construction, which can be extremely volatile from month to month. Apartment building, defined as two or more units, jumped by 36 percent to a seasonally adjusted annual rate of 340,000 units.

The larger single-family sector dropped by 1.7 percent to an annual rate of 692,000 units.

Applications for building permits, considered a good sign of future activity, also recorded an increase in April, rising by 4.9 percent to 978,000 units. It was the first gain in permits in five months.

But economists believe that housing construction will remain under pressure until builders have more success in reducing a huge backlog of unsold homes.

That effort is being made more difficult by a record wave of foreclosures as millions of borrowers lose their homes because they cannot keep up with escalating payments, particularly on subprime mortgages, loans extended to people with weak credit histories.

By region of the country, construction posted the largest gain in the Midwest, an increase of 24.4 percent when compared to March. Construction rose 18.5 percent in the West and was up 3.6 percent in the South. However, construction fell by 12.7 percent in the Northeast.

Even with the improvement, housing construction nationwide was 30.6 percent below the level of activity a year ago.


The National Association of Home Builders reported Thursday that its monthly survey of builder sentiment edged down in May to a reading of 19, just above the all-time low of 18 set in December. The survey had held steady at the low level of 20 from February through April.

David Seiders, the group's chief economist, said that conditions in the industry have continued to deteriorate.

[sjc_1]

It may be two years or more before single family housing is back on track. The high asking prices for existing homes drove up the loan amounts and caused people to get over extended. Maybe we need a windfall profits tax for greedy home sellers.

[forthepeopl1]

common sense is all that is needed.here it is.
U.S. Treasury Secretary Paulson possibility of bailout for individual mortgage holders, singling out the growing number
going "under water" as their loans exceed the diminishing value of their properties.

please this is a simple thing to fix, why are you bending over for all of the wallstreet scum.
you have the right to do what this paulson/ben did for wallstreet,saying they had to to save america. so you can say the same thing, but this time you would be saveing america, and not wallstreet.
you must come out and stop the forcloseing of all these millions of homes, now,
ALL YOU HAVE TO DO IS MANDATE THAT ALL MORTGAGES THAT HAVE BEEN TAKEN OUT FROM 2000 TO 2007 BY ALL AMERICANS TO BE RE-FI A.S.A.P. NO EXCEPTIONS,


NO MATTER WHAT THE CREDIT IS, THEY WILL RE-FI EVERYONE AT JUST OVER PRIME, AND AT A RATE OF 40% OF WHAT IS OWED ON THE PROPERTY( PERSONAL HOMES ONLY)!!
WHY, BECAUSE MOST HOST ARE SELLING AT FORCLOSER FOR 20 TO 30 CENTS ON THE DOLLAR, SO AS TO WHAT PAULSON SAID TO BEARSTEARN 2 DOLLARS IS BETTER THAN NO DOLLARS SO TAKE THE DEAL..NOW REMEMBER ALL OF YOU, IF THIS COMPANY IN 6 MONTHS LOST 98% OF THEIR VALUE FROM 700 BILLION TO WHAT IS IT NOW. AND FOR SOMEONE TO COME IN AND BUY IT FOR NOTHING, WHAT IS THE REAL VALUE OF ALL THESE HOMES???NOBODY KNOWS, SO WHY NOT JUST START OVER??? AND STOP THE BLEEDING FOR ALL AMERICANS.

[e-mail]
DAVID A BELANGER

[forthepeopl1]

right, what a fars,lies, they will say anything to get people to buy into the stock market...

[oscarez]

Big jump in apartment construction. Well duh, the families that are losing their homes to foreclosure will need a place to live.