Housing Starts Up 8.2%

Construction of new homes posted the biggest increase in more than two years in April and applications for new building permits turned up for the first time in five months, a rare bit of good news in what has been the worst downturn in housing in more than two decades.

The Commerce Department reported recently that housing construction rose 8.2% in April to a seasonally adjusted annual rate of 1.03 million units. A big jump in apartment construction offset further weakness in single-family homes. The gain represents a recovery after a steep slump in March building that had pushed activity to the slowest pace in 17 years.

The surprising rebound in April may be temporary, given the headwinds builders are confronting at the present — from slumping sales to soaring home foreclosures.

Even with the improvement, housing construction nationwide was 30.6% below the level of activity a year ago. The National Association of Home Builders reports that its monthly survey of builder sentiment edged down in May to a reading of 19, just above the all-time low of 18 set in December. The survey had held steady at the low level of 20 from February through April.