May 19 (Bloomberg) -- Builders broke ground on the fewest homes on record in April as a plunge in condominiums and apartment buildings overwhelmed the second straight gain in starts on single-family dwellings.
Housing starts unexpectedly slid 13 percent to an annual rate of 458,000, led by a 46 percent tumble in multifamily starts, which tend to be more volatile, Commerce Department figures showed in Washington. Building permits, a sign of future construction, fell 3.3 percent to a record low of 494,000.
While the homebuilding slump has brought the supply of new properties below the rate households are being created, surging unemployment will temper the likely rebound, analysts said. The plunge in apartments and condominiums also reinforces concern about the impact of the credit crunch on commercial real estate.
“This continues to support the story that new construction probably bottoms by early summer,” said Adam York, an economist at Wachovia Corp. in Charlotte, North Carolina. “We’re getting closer but that doesn’t mean we’re looking for a strong rebound” he said, adding that “obviously, financing remains difficult for builders and buyers alike.”
Home Depot Inc. and Lowe’s Cos. this week both posted first-quarter earnings that exceeded analysts’ estimates, underscoring signs of a turn in the industry. Confidence among U.S. homebuilders in May rose to the highest level since September, a National Association of Home Builders/Wells Fargo survey showed yesterday. more...
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