Wednesday, May 20, 2009

Weak Housing Data Has a Bright Spot

The Wall Street Journal - New-home construction in the U.S. fell to a new low last month. But an increase in the construction of single-family homes suggests the slump in home building is drawing to a close.

In April, the pace of construction starts fell to an annual rate of 458,000 new homes, a 12.8% drop from March. That was the lowest level since 1959, when the Commerce Department began tracking the figures.

The decline was wholly the result of a sharp drop in ground-breaking for apartment buildings and other multifamily dwellings. Single-family home construction rose 2.8% to 368,000 in April, after rising slightly in March as well.

The increase in the single-family figures adds to evidence that residential construction has begun to recover. The National Association of Home Builders said Monday that its measure of home-builder sentiment increased for a second month in May. New-home sales appear to be turning upward.

Steve Temkin, owner of T&M Building in Torrington, Conn., has started to see business pick up. After weekends when hardly anyone came by, foot traffic in his model homes is back up, and he just made the first two sales in nearly a year in one of his new projects. To adjust to the weak market, he is building smaller homes starting at about $220,000 -- in places where prices once started at more than $350,000.

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