US housing market gains traction
WASHINGTON A rebound in groundbreaking for US homes in April suggested the housing market recovery was gaining some traction, even though permits for future building fell.
The Commerce Department stated housing starts increased 2.6 per cent to a seasonally adjusted annual rate of 717,000 units. March’s starts were revised up to a 699,000-unit pace from a previously reported 654,000 unit rate.
Economists polled by Reuters had forecast housing starts rising to 680,000-unit rate. Compared to April last year, residential construction was up 29.9 per cent.
The housing market is showing some signs of life after collapsing six years ago, but remains hobbled by a glut of unsold homes.
However, rising demand for rentals, which has seen builders breaking more ground on apartment projects, is helping to stabilise the market.
“Ideally supply is getting more in line with demand, and low rates may be finally helping the turnaround, stated David Carter, chief investment officer at Lenox Wealth Advisers in New York.
“However, this housing story is much smaller than news out of Greece and might get easily forgotten.”
US stock index futures added slightly to earlier gains after the data, while Treasury debt prices held on to earlier losses.
Although home building accounts for about 2.3 per cent of gross domestic product, the housing market has an outsized reach on the US economy.
Reuters
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Submited at Thursday, May 17th, 2012 at 8:00 pm on Uncategorized by Alina
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