Posted on 05/16/2008 5:46:29 AM PDT by abb
Initial construction of U.S. homes rose unexpectedly in April, according to a government report released Friday.
Privately owned housing starts rose to a seasonally adjusted annual rate of 1,032,000 in April, according to the Commerce Department. The rate was up 8.2% from March's revised reading of 954,000 but 30.6% lower than April of 2007.
Economists were expecting housing starts to decline to 940,000, according to consensus estimates compiled by Briefing.com.
Construction of new single-family homes, however, was at a rate of 692,000 in April, or 1.7% below March's number. That is the lowest reading of that measure since January 1991. Single-family homes are considered the core of the housing market.
Applications for building permits, considered a reliable sign of future construction activity, rose to a seasonally adjusted annual rate of 978,000 last month. That's 4.9% above the revised 932,000 rate in March. Economists were expecting permit applications to fall to 912,000.
The sharp drop in starts has been reflected in the plunging revenue and mounting losses of the nation's largest builders. D.R. Horton (DHI, Fortune 500), the nation's largest home builder by revenue, reported a larger than expected loss earlier this month, while two of its rivals, Pulte Homes (PHM, Fortune 500) and Centex (CTX, Fortune 500) both reported losses more than triple estimates late last month.
Earlier this week, luxury home builder Toll Brothers (TOLL) reported preliminary results showing a sharp decline in revenue and orders, as it said many buyers who put down a deposit on a new home are pulling out before they sign a sales contract. Of the nation's largest home builders, only NVR (NVR, Fortune 500) has managed to stay profitable. To top of page
(Excerpt) Read more at money.cnn.com ...
Housing starts surge on apartment construction
Single-family starts continue decline to 17-year low
By Rex Nutting, MarketWatch
Last update: 8:30 a.m. EDT May 16, 2008
WASHINGTON (MarketWatch) - U.S. home builders broke ground on 8.2% more homes in April, led by a 36% increase in multi-family units, the Commerce Department estimated Friday.
Housing starts rose to a seasonally adjusted annual rate of 1.032 million, far more than the 954,000 estimated for March or the 939,000 expected by economists surveyed by MarketWatch. It was the third increase in the past four months.
Starts of single-family homes declined for the 12th straight month, falling 1.7% to a seasonally adjusted annual rate of 692,000, the lowest since January 1991.
The increase is certain to bolster the argument of those who see a bottom in the housing slump. Others say that market suffers from a severe oversupply of homes and the last thing the market needs is new construction.
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http://www.reuters.com/article/bondsNews/idUSN1531442420080516
April housing starts, permits up more than forecast
Fri May 16, 2008 8:42am EDT
WASHINGTON (Reuters) - Construction starts on new U.S. homes rose by a surprisingly strong 8.2 percent in April and applications for new building permits turned up for the first time in five months, the Commerce Department said on Friday in a report showing that the hard-hit housing sector still had some spring vigor.
Starts in April ran at a 1.032-million-unit annual rate, up from a revised 954,000-unit rate in March, while permits gained 4.9 percent to 978,000 a year from a revised 932,000 in March.
That was a significantly stronger performance than anticipated by economists surveyed by Reuters who had forecast April starts at a 940,000-unit rate and permits at 920,000 a year.
Construction has suffered as the housing industry copes with a wave of foreclosures and with inventories of unsold homes stemming from a subprime mortgage crisis that has made lenders wary and put pressure on builders to curb their inventories.
U.S. Treasury Secretary Henry Paulson and top Federal Reserve policy-makers have identified the housing downturn as the biggest single risk for the economy and Congress has been working feverishly on proposals for guaranteeing shaky mortgage loans to try to save homeowners from losing their homes.
On Thursday night, housing industry sources indicated that leaders of the U.S. Senate Banking Committee had reached a deal on a broad housing rescue plan in which mortgage giants Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) will support a federal mortgage insurance fund.
The $300 billion fund would be run by the Federal Housing Administration and would offer loan guarantees to help refinance distressed mortgages, with borrowers agreeing to forgive portions of troubled loans.
(Reporting by Glenn Somerville; Editing by Joanne Morrison)
“March’s revised reading of 954,000 but 30.6% lower than April of 2007”
The only part of the article that matters.
I think we need a financial press version of Newsbusters. The spin that seeps out of the financial MSM is pure sewage.
As soon as the masses trying to sell their present homes wake up to the reality their place isn't worth what they think it's worth but only what someone will pay them for it, the next housing market cycle will begin. Also, given the depth of this housing pull back I expect when the market turns it will climb sharply due to the "compressed spring" phenomenon that says when a market is pushed down sharply and quickly the rebound is just as quick. And while I do not expect housing prices to immediately climb to 2004-5 levels I do believe they will be much higher in 2 years then they are today.
I don't think there has ever been a better time to buy a new home then now with prices heavily discounted and mortgage rates as low as they are.
When a market bottoms it doesn't send out a email to the world. It will slow it's descent then bump along doing not much of anything for some period of time and then will inexorably begin to creep upwards. All market downturns end, every single one of them without exception. This more then any other I can recall has been greatly over done due in part to the hysteria of the lamestream media. Are we at a bottom? I can't call the bottom any better then anyone else but I feel confident we are, if not there, within a super short distance of being there.
But...but....the BUBBLE! WHERE’S MY BUBBLE?.........
Bottoming out or dead cat bounce?
Welcome to Free Republic, NJ neighbor!
Breaking news??
Neighbor? LOL, what exit?
GSP 114
IMO, This increase reflects local, independent builders taking advantage of the vacuum left by the national volume builders (tract builders) who pulled out of many regional markets.
The tract builders sell off their remaining lots at a discount when they pull out. The local guys build a better, custom quality home that makes the tract guy’s houses look like shipping crates.
In a nicely situated subdivision, which house do you think a buyer would prefer to purchase given that each home was in the buyer’s price range?
Which should tell you one thing, people can't afford new homes and are moving into apartments. Amazing how the MSM can spin things with a few facts left out.
Building permits have always been measured using the same criteria. If multi housing permits are up the single family ones will IMO follow.
GSP 69
This is not a good thing. Right we need to burn off the housing inventory before prices can start to rise again. Building new homes in a declining market only adds to the inventory supply and works to lower prices further.
baffling. One would expect the “old” homes to be sold first, but what do I know and good news are good news.
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