Housing Starts, Permits Plummet
Housing Starts, Permits Plummet
The U.S. Commerce Department reported Tuesday that housing starts and permits for new projects fell in April as the housing market continues to deal with an oversupply of homes already listed. The agency said housing starts fell 10.6 percent last month to a seasonally adjusted annual pace of 523,000 units. March's starts were revised upward from an initially reported 549,000-unit-pace to 585,000. Analysts taking part in a recent Reuters survey had projected an increase in starts to a pace of 568,000.
Compared to April 2010, residential construction is down nearly 24 percent, the biggest year-to-year decline in the data since October 2009. Many builders are hesitant to take on new projects because the market is saturated with used homes, especially foreclosed homes, which typically sell at a 20 percent discount to non-distressed properties. The National Association of Homebuilders reported Monday that homebuilder sentiment was unchanged in May, as builders' outlooks remain bleak.
While most builders expect a slight sales pickup during the spring, they anticipate an overall weakening of market conditions over the next six months. New residential projects in May were significantly limited by a 24.1 percent decline in starts of multi-family buildings, while single-family housing starts fell 5.1 percent. New building permits fell 4 percent to an annual rate of 551,000, fueled by an 8.8 percent drop in multi-family permits. Single-family permits edged down 1.8 percent. Net home completions, meanwhile, climbed 4.1 percent to a 554,000-unit pace in April.
The U.S. Commerce Department reported Tuesday that housing starts and permits for new projects fell in April as the housing market continues to deal with an oversupply of homes already listed. The agency said housing starts fell 10.6 percent last month to a seasonally adjusted annual pace of 523,000 units. March's starts were revised upward from an initially reported 549,000-unit-pace to 585,000. Analysts taking part in a recent Reuters survey had projected an increase in starts to a pace of 568,000.
Compared to April 2010, residential construction is down nearly 24 percent, the biggest year-to-year decline in the data since October 2009. Many builders are hesitant to take on new projects because the market is saturated with used homes, especially foreclosed homes, which typically sell at a 20 percent discount to non-distressed properties. The National Association of Homebuilders reported Monday that homebuilder sentiment was unchanged in May, as builders' outlooks remain bleak.
While most builders expect a slight sales pickup during the spring, they anticipate an overall weakening of market conditions over the next six months. New residential projects in May were significantly limited by a 24.1 percent decline in starts of multi-family buildings, while single-family housing starts fell 5.1 percent. New building permits fell 4 percent to an annual rate of 551,000, fueled by an 8.8 percent drop in multi-family permits. Single-family permits edged down 1.8 percent. Net home completions, meanwhile, climbed 4.1 percent to a 554,000-unit pace in April.
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