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Fewer homes built by contractors in US
Source: Bloomberg News |
June 20, 2012, Wednesday
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BUILDERS in the US broke ground on fewer homes than forecast in May as a slump in the construction of apartments swamped a pickup in single-family houses.
Starts fell 4.8 percent to a 708,000 annual pace from a revised 744,000 rate in the prior month that was the highest since October 2008, the Commerce Department said yesterday in Washington. The median forecast of 77 economists surveyed by Bloomberg News called for a 722,000 pace.
Building permits, a proxy for future construction, climbed to the highest level since September 2008, showing the combination of lower prices and record-low mortgage rates is underpinning demand and encouraging new projects. At the same time, competition from cheaper previously owned properties and stricter lending rules remain hurdles for an industry that's been the weakest link for the economic expansion.
"We're clearly seeing some improvement in housing, though it's still modest," Russell Price, senior economist at Ameriprise Financial Inc in Detroit, said before the report. "The investor class is still there, they're still active at the lower end of the price range of the market."
Building permits rose 7.9 percent to a 780,000 annual rate, reflecting gains in single-family and multifamily homes.
The Federal Reserve's Open Market Committee, which sets the course of the central bank policy, began a two-day meeting yesterday to decide if more monetary stimulus is needed to lift growth as the labor market stumbles and risks from Europe's sovereign debt crisis rise.
Estimates in the Bloomberg News survey for May housing starts ranged from 685,000 to 750,000.
Starts fell 4.8 percent to a 708,000 annual pace from a revised 744,000 rate in the prior month that was the highest since October 2008, the Commerce Department said yesterday in Washington. The median forecast of 77 economists surveyed by Bloomberg News called for a 722,000 pace.
Building permits, a proxy for future construction, climbed to the highest level since September 2008, showing the combination of lower prices and record-low mortgage rates is underpinning demand and encouraging new projects. At the same time, competition from cheaper previously owned properties and stricter lending rules remain hurdles for an industry that's been the weakest link for the economic expansion.
"We're clearly seeing some improvement in housing, though it's still modest," Russell Price, senior economist at Ameriprise Financial Inc in Detroit, said before the report. "The investor class is still there, they're still active at the lower end of the price range of the market."
Building permits rose 7.9 percent to a 780,000 annual rate, reflecting gains in single-family and multifamily homes.
The Federal Reserve's Open Market Committee, which sets the course of the central bank policy, began a two-day meeting yesterday to decide if more monetary stimulus is needed to lift growth as the labor market stumbles and risks from Europe's sovereign debt crisis rise.
Estimates in the Bloomberg News survey for May housing starts ranged from 685,000 to 750,000.
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