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BCN-14
US-HOUSING-BUILDING-INDICATOR
Still sluggish, US home construction rebounds in April
WASHINGTON, May 17, 2019 (BSS/AFP) – Construction of new homes in the
United States rose in April, reversing the declines of prior months as
building surged in the Midwest and Northwest regions, government data showed
Thursday.
But the pace of home construction remained lower than the year-ago level
ahead of the summer home-buying season and permits for new construction, a
sign of building in the pipeline, rose more slowly.
Analysts say construction will have to quicken to keep pace with demand in
what has been a weak spot for the US economy in recent years.
In April, total construction starts for single-family houses and
apartments rose 5.7 percent compared with March to an annual rate of 1.24
million units, according to the Commerce Department.
The pace was slightly faster than economists had been expecting and came
despite slowdowns in the South and West regions.
However, the numbers were well within broad margins of error and officials
caution that trends may not be apparent for six months.
The April result was still 2.5 percent below the same month last year.
Permits for new homes, a less volatile data series, rose a slower 0.6
percent compared to March and were five percent below the year-ago levels —
but all of this gain was in apartments.
Economists say a recent easing of interest rates has helped boost demand
for mortgages but it is unclear whether construction will keep pace with
demand as wages rise and unemployment falls.
Ian Shepherdson of Pantheon Macroeconomics said Thursday that construction
would have to pick up to match the pace of sales.
“Homebuilders eventually will act; no one wants to lose share in a rising
market, and we expect housing construction to make a small positive
contribution to Q2 GDP growth,” he said in a note for clients.
BSS/AFP/HR/1010