A Bright Spot in the Housing Data

Published by peter | Filed under Market Trends

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.

Many economists believe the single-family construction figures are the best measure by which to gauge the housing market. They say builders breaking ground for new homes is the most reliable sign that mortgage woes are getting resolved, that prices have fallen to appropriate levels and that the glut of unsold homes has thinned.

Even though housing may have turned the corner, that doesn’t herald a robust recovery in a market where financing is difficult to come by, and many homes continue to bear “for sale” signs.