December 1, 2023

Pace of Home Building Rose at Vigorous Clip in February

The Commerce Department said on Tuesday that builders broke ground on houses and apartments last month at a seasonally adjusted annual rate of 917,000. That rate was 910,000 in January. February’s pace was the second-fastest since June 2008, behind December’s rate of 982,000.

Single-family home construction increased to an annual rate of 618,000, the most in four and half years. Apartment construction also ticked up, to 285,000.

The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent to 946,000. That was also the most since June 2008, just a few months into the recession.

The figures for January and December were also revised upward. Housing starts have risen 28 percent over the last 12 months.

Separately, a private report showed that the number of Americans with equity in their homes increased last year. That suggested that one of the biggest drags from the housing crisis was easing, and it could clear the way for more people to put homes on the market.

“The road ahead for housing is still, so far, looking promising,” Jennifer Lee, an economist at BMO Capital Markets, said in a note to clients.

The housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.

Still, the supply of available homes for sale remained low. That has helped push up home prices. They rose nearly 10 percent in January compared with 12 months earlier, according to CoreLogic, a research firm, the biggest increase in nearly seven years.

Higher prices mean more Americans have equity in their homes. Last year, about 1.7 million Americans went from owing more on their mortgages than their homes were worth to having some ownership stake, CoreLogic reported on Tuesday. Still, 10.4 million households, or 21.5 percent of those with a mortgage, remain “under water,” or owe more on their home than it is worth.

Article source:

Auto Sales for February 2013 Jumped 3.7%

Automakers sold 1.19 million vehicles during the month, a 3.7 percent increase over the period a year earlier, according to the research firm Autodata.

The seasonally adjusted annual sales rate, a closely watched market indicator, totaled about 15.4 million vehicles. The rate bodes well for the industry, as automakers increase production to meet demand for their new products.

The February results were a bit lower than anticipated, analysts said, attributing part of the slowdown during the latter part of the month to rising gas prices and fluctuations in the stock market.

“Whenever there is uncertainty in the stock market, the car market doesn’t like it,” said Jesse Toprak, an analyst with the automotive research site “But despite lower stocks and higher gas prices, consumers continued to buy.”

The two largest Detroit car companies, General Motors and Ford Motor, posted some of the best results among all the major automakers.

G.M. said it sold 224,000 vehicles in February, a 7.2 percent increase from the same month in 2012.

All of G.M.’s domestic brands — Chevrolet, Cadillac, GMC and Buick — had higher year-over-year sales.

Cadillac led the way with a 20 percent gain, primarily because of healthy sales of the new ATS compact sedan.

G.M. also reported increases in sales of its newest small cars, like the Buick Verano and the Chevrolet Spark. But its most prominent gains were in pickup trucks. The company said sales of the Chevrolet Silverado pickup rose 29 percent, and the GMC Sierra increased 25 percent.

Executives attributed the performance to a surge in housing starts and the need for construction companies to replace older pickups.

“A significant tail wind for our industry is new home construction, which is creating jobs and fueling the demand for pickups,” said Kurt McNeil, G.M.’s vice president for United States sales operations.

Ford said it sold 195,000 vehicles during the month, which represents a 9.3 percent gain from a year ago.

Much of Ford’s gains came from sales of sport utility vehicles like the Escape and Explorer. The company’s redesigned midsize sedan, the Fusion, also had a good month, with a 28 percent improvement over last year.

And like G.M., Ford also benefited from higher demand for pickups. Ford said that it sold 54,000 F-series trucks during the month, a 15.3 percent increase from February 2012.

But Ford is still struggling to invigorate its lagging Lincoln luxury brand, which dropped 29 percent in sales.

“Lincoln’s performance was dismal,” said Michelle Krebs, an analyst with the research site

The growth rate at Chrysler, the smallest of the Detroit automakers, slowed somewhat after several months of recording double-digit increases.

The company said that it sold 139,000 vehicles in February, a 4.1 percent improvement over a year earlier. That is a smaller increase than Chrysler has reported in previous months.

“In spite of a cautious ramp up of some of our most popular products, which limited inventory last month, we still managed to record our strongest February in five years,” said Reid Bigland, head of United States sales for Chrysler.

Chrysler’s best performers during the month were passenger cars like the new Dodge Dart.

Sales of its Ram pickup increased 3 percent, while sales of its Jeep sport utility vehicles dropped 16 percent.

The big Japanese automakers had mixed results, as they continued their methodical comeback from inventory disruptions because of the earthquake and tsunami in Japan two years ago.

Toyota, the largest Japanese car manufacturer, said it sold 166,000 vehicles in February, about 4.3 percent more than a year earlier.

Usually, Toyota’s passenger cars are its hottest sellers and its trucks trail the market. But in February the roles were reversed, as its car sales dropped about 3 percent and its sport utility vehicles and truck sales increased by 16 percent.

Honda reported a 2 percent drop in sales, to 107,000 vehicles. The company said heavy winter storms in the Northeast, traditionally one of its strongest regions, contributed to the decline.

And Nissan said its February sales slid about 6.6 percent, to 99,000 vehicles.

February was a relatively good month for Volkswagen, the big German automaker, which is rapidly expanding its United States operations.

V.W. said it sold 42,000 vehicles during the month, an 8.4 percent increase from the previous year. The results were fueled primarily by strong sales of its Audi luxury-brand vehicles, which rose about 28 percent.

Article source:

You’re the Boss Blog: This Week in Small Business: The Clock Is Ticking


A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

The Sequestration Budget Cuts: The Clock Is Ticking

The budget talks continue, and here are four graphs that sum up the situation. Kevin Drum says there is no sequestration deal to be made. Matt Miller says the sequestration is overhyped. Alex Seitz-Wald believes you should be afraid. Deborah Solomon says that a new proposal from Alan Simpson and Erskine Bowles “shows how Washington’s affinity for small deals that tackle the deficit incrementally are deepening the nation’s fiscal hole.” Michelle Benjamin says that Congress should employ basic small-business principles to help balance the budget. Officials at the Federal Reserve disagree on how to increase employment.

The Economy: Gas Prices

January’s producer prices remain about the same but industrial production falls. Gas prices are approaching record highs. The Nasdaq starts hits prerecession levels. Housing starts fell in January, and builder confidence went virtually unchanged in February. But the Houston real estate market is in an all-time frenzy, and the Small Business Administration says small businesses in Texas continue to grow. The Architecture Billings Index surges.

Your People: The Oddest Interview Questions

Some workplaces now offer electric car charging for their employees. Karl Stark and Bill Stewart list three reasons to treat employees like family. These are the six happiest and unhappiest industries to work in. Walter Hickey thinks that an increase in the minimum wage could be a huge boon to small businesses. Cindy Krischer Goodman says that remote employees require care to feel like part of the team. Here are the oddest interview questions for 2013. A new application helps employers provide continuing feedback. These guys gave terrible gifts for Valentine’s Day. And this is why hiring “throwaway employees” is bad policy. A Russian reacts to last week’s meteorite.

Management: A Vegan Baker’s Day

A new study finds that internationally focused small- and medium-size enterprises are more likely to prosper in a global economy. Laureen Wishom offers tips on becoming the go-to expert in your niche, including: “Whatever business you are in, the fastest way to build your reputation and increase your visibility is working together with other people.” Did you know that the ultimate co-working space may have been sitting in the middle of your town or city for decades? Mark Zuckerberg buys more Facebook shares and introduces a $33 million science prize with Sergey Brin of Google. A day in the life of a vegan baker is more interesting than you might think. Lisa Braithwaite suggests trying not to be too perfect, and if you’re experiencing a crisis with your product, Marty Brochstein can help. Steve Pavlina reminds us that “if a goal isn’t tough, it’s probably beneath you.”

Finance: Kickstarter

An index reveals deteriorating credit conditions for small businesses as delinquency rises and personal income growth slows. A 3-D pen project on Kickstarter sets a goal of $30,000 and raises more than $1.5 million. But as 3-D printing becomes more accessible, copyright questions arise. An 89-year-old grandmother finances her start-up on Kickstarter, too. Julia Kirby explains how crowdsourcing a “daily twist” paid off for Nabisco. Pinterest is valued at $2.5 billion.

Start-Up: The Valley of Death

Martin Zwilling says there are 10 ways for start-ups to survive the “Valley of Death.” Ninety-four percent of the revenue generated by start-ups in the United States comes from outside Silicon Valley and Silicon Alley. Choire Sicha thinks New York should toss start-ups “a reduced Metrocard once in a while.” This start-up offers locations for cutting-edge board meetings. Stacey Higginbotham says tech start-ups are the luckiest start-ups, and Matthew Lynley shares five rules for building the next big enterprise start-up, including: “Your users are your best salespeople.” A survey shows that starting your own business can lead to a better life. Here’s how some Egyptian entrepreneurs are building start-ups in the midst of a revolution.

Marketing: Tips for Tough Times

Paul Anderson has a few tips for entrepreneurs looking to improve adoption of customer-management software, including: “Before you migrate your old database to the customer-management software, scrub it to remove outdated, wrong, incomplete and duplicate information.” Anna Farmery explains why brands need to be imperfectly perfect. Patrick Coffee believes that the recent Carnival cruise disaster is also a public relations opportunity. This is how to start meaningful word-of-mouth conversations by giving stuff away. Adrienne Erin shares a few little-known ways to cook up great content. Wendy Weiss has five tips for selling in tough times. Pete Leibman explains why looks matter. Walker Smith explains why people buy. Ivanka Trump introduces a new fragrance. A dog changes expressions quickly.

Social Media: Fourth Place

Chris Garrett lists the five essential skills for today’s online marketer. Sujan Patel has five search engine optimization rules to apply now. A new platform enables virtually anyone to build an online business around knowledge, passions, hobbies and work experiences. A popular blogger considers getting rid of comments. A new Pew study reveals which customers are using which social media networks. Here are eight ways to get more leads for your business on LinkedIn. Tumblr becomes the fourth place for brands. Among Inc. 500 companies, blogging and use of LinkedIn is up, while use of Facebook is down. Twitter rolls out a new programming tool for advertisers. Yahoo rolls out a new front page. A guy does a back flip in a Mini.

Around the Country: Ending ‘Showrooming’

Office Depot agrees to buy OfficeMax. FedEx offers a new product to help small businesses streamline shipping, while Square continues its quest for small-business domination with its new Business in a Box. Google may open retail stores. Best Buy tries to end “showrooming.” Starbucks introduces drive-thru video ordering. These are the 21 most on-time airlines. Dan Kois says that reclining in your airline seat is “pure evil.” Drivers on marijuana test their driving skills. These are America’s top 10 cities for small businesses. A Delaware small-business center helps a pub owner expand.

Red Tape: The Postal Service Gets Fashionable

As some businesses criticize the costs of the Affordable Care Act, the federal government announces that it will run 26 health care exchanges. Kent Hoover reports that small businesses will get more (and pay more) for essential health benefits. Projected Medicare spending has fallen by $500 billion. The penny is considered the most wasteful thing the government does, but a digital coin turns four and approaches a $30 value. The cash-short United States Postal Service will introduce a clothing line. Lamar Whitman takes a look at what to expect from the Startup 3.0 bill moving through Congress. This is what you need to know about the Marketplace Fairness Act. State motor vehicle workers in New Jersey call the police on a man who insisted on wearing a pasta strainer on his head during the taking of his driver’s license photo. A federal watchdog office reportedly saves small businesses $2.4 billion in regulatory costs. Chris Peden explains which version of Schedule C to use to file your taxes, and an Internal Revenue Service workshop provides tax-time help for small businesses.

Technology: From Zero to 60 Million

The F.B.I. collaborates with Facebook. Burger King, Jeep and Apple are hacked. MTV and BET pretend they are hacked. Some are pointing the finger at China. replaces Hotmail and goes from zero to 60 million users in six months. Comcast announces a suite of cloud-based business solutions that can be purchased through one integrated Web portal. Google demonstrates how it feels to wear its Glass. Dell’s profit drops 31 percent. Polly S. Traylor wonders if your business should go PC-free. Here are five apps for stellar small-business management and 10 apps you need to dominate your workday.

Tweet of the Week

@JenAbd: The gas price is higher than my GPA.

The Week’s Bests

Mark Suster explains why the “Harlem shake” is the beginning of an important new video trend: “Participation. We are the media. We want to be in it. Create it. Take part in it. Have a say, a vote. Think ‘American Idol’ voting, where the audience gets to feel like they’re participating. And where they’re willing to pay by dialing a paid number to feel like they’re, well, participating.”

Chris Heivly, writing about nondisclosure agreements, explains why he won’t sign your N.D.A.: “I am in the business of backing great teams working on great ideas. Inherent in this new relationship is trust. I am not going to steal your idea. I don’t have time to build a company — I invest in companies. I am not in the business of pitching your idea to others to build. And most important, if I did this just once, I would be labeled, and my deal flow would disappear.”

Christopher Mims explains how robots are eating the last of America’s — and the world’s — traditional manufacturing jobs: “Not everyone is suffering. Skilled workers, for example, are earning more than ever. So are the very rich, those who own the capital that can be put to work in the world’s increasingly person-free farms, mines and factories. But those who used to make middle-class wages are increasingly slipping into lower-paying, service-sector jobs. That’s led to what M.I.T. economist David Autor calls an ‘hourglass economy,’ with more workers at both the top and (mostly) the bottom of the income spectrum.”

This Week’s Question: Do you think it’s evil to recline in an airline seat?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

Article source:

Claims for Jobless Benefits Drop

WASHINGTON — The number of Americans filing new claims for unemployment benefits tumbled to a five-year low last week, while housing starts surged, the government said Thursday in a pair of new economic reports.

Initial claims for state unemployment benefits fell 37,000 to a seasonally adjusted 335,000, the lowest level since January 2008 and the largest weekly drop since February 2010, the Labor Department said.

The previous week’s figure was revised to show 1,000 more applications than previously reported.

While last week’s decline ended four consecutive weeks of increases, it is probably not the start of a new trend or a sign of a significant shift in labor market conditions, as claims tend to be volatile around this time of the year because of large swings in the model used by the department to iron out seasonal fluctuations.

A Labor Department analyst said the model had expected a large increase in claims last week, but the actual number of filings only showed a modest increase, leading to a big decline in the seasonally adjusted figure.

The four-week moving average for new claims, a better measure of labor market trends, fell 6,750 to 359,250, suggesting some improvement in underlying labor market conditions.

The claims data covered the week used for January’s nonfarm payrolls survey, to be released early next month. Job growth measured by the survey has been gradual, with employers adding 155,000 new positions in December. The unemployment rate held steady at 7.8 percent last month.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid increased 87,000 to 3.21 million in the week ended Jan. 5. The four-week average of the so-called continuing claims was the lowest since July 2008.

In a separate report, the Commerce Department said Thursday that groundbreaking to build new homes surged 12.1 percent last month to a 954,000-unit annual rate.

It was the fastest pace since June 2008, supporting the view that housing is poised to provide a substantial boost to the United States economy. But data for housing starts can be volatile and is sometimes subject to large revisions. The government revised downward its estimate for November housing starts, for example, to a 851,000-unit rate from the originally reported 861,000.

Some of the strength in December’s reading for housing starts came from a 20.3 percent surge in multiunit construction; that component is especially volatile.

Permits for future home construction edged higher to a 903,000-unit rate, the quickest since July 2008. Groundbreaking for single-family homes, the largest segment of the market, climbed 8.1 percent last month to a 616,000-unit pace.

Article source:

Automakers End 2012 With Sales at 5-Year High

Sales of new cars and trucks increased 9 percent in December, a gain that put total sales for 2012 at about 14.5 million vehicles — the industry’s best performance in five years, according to the research firm Autodata.

That represents a 13 percent increase over 2011, and raises expectations that demand will continue to rise as more Americans need to replace their aging vehicles with new models.

Auto executives forecast that the United States market would grow to at least 15.5 million this year and possibly higher, if housing starts and other economic factors continue to improve.

“For the industry, 2012 was mission accomplished,” said Jesse Toprak, an analyst with the auto research site “Companies are hitting their sales goals, and they are doing it with fewer incentives.”

Much of the growth has been concentrated in the comebacks of Toyota and Honda from supply chain disruptions caused by the earthquake and tsunami in Japan two years ago. And while automakers like Chrysler and Volkswagen posted hefty increases throughout the year, the two biggest American companies, General Motors and Ford Motor, lagged the overall gains.

December was a microcosm of the year’s results, as G.M. and Ford on Thursday reported smaller sales increases than those of their chief domestic, European and Asian rivals. G.M. said sales in December increased 4.9 percent, compared with the same month a year ago, primarily because of new products like the Cadillac ATS sedan and higher incentives on its Chevrolet Silverado and GMC Sierra pickups.

The company had been losing ground in the high-profit pickup segment until it added discounts to the Silverado, which posted a 6.1 percent sales increase in December, and the Sierra, which was up 13.4 percent. For the year, G.M. sold 2.59 million vehicles, an increase of 3.7 percent from 2011.

G.M.’s head of United States sales, Kurt McNeil, said the company expected significant growth to about 15.5 million vehicles industrywide this year. He noted that Tuesday’s pact on the fiscal crisis in Washington removed potential concerns for consumers shopping for new vehicles.

“We are especially pleased that the politicians on both sides of the aisle in Washington were able to compromise,” Mr. McNeil said in a conference call with analysts on Thursday. “The short-term crisis has passed.”

Ford reported a slight sales increase of 1.6 percent in December, as safety recalls for its new Escape S.U.V. and Fusion sedan depressed its overall results. Ford said that sales of the Fusion dropped 10.8 percent during the month, and Escape sales slid 21.3 percent. The company has been plagued with multiple recalls on engines and other parts on the new vehicles, which are usually among its strongest sellers.

The drop-off was mitigated by strong results for Ford’s two smallest cars, the Focus, which increased in sales by 58.3 percent, and the Fiesta, which was up by 52.8 percent.

For all of 2012, Ford’s United States sales increased 4.7 percent, to 2.24 million vehicles. Ken Czubay, head of Ford’s United States sales and marketing, said the company’s small-car sales were its best in more than a decade.

Ford predicted that industry sales could possibly reach 16 million vehicles in 2013, as more consumers trade in older models and buy new, more fuel-efficient ones. That peak hasn’t been reached since sales of 16.1 million in 2007.

Chrysler, the smallest of the Detroit companies, was the star performer in December, with a 10.4 percent increase.

The company’s new compact car, the Dodge Dart, gained traction with sales of 6,100 — its highest monthly total since it was introduced last summer. Much of Chrysler’s lineup — ranging from Jeep S.U.V.’s to the tiny Fiat 500 — posted sales records for the month of December. For the year, Chrysler said it sold 1.65 million vehicles, a 20.6 percent increase from 2011.

Toyota reported a 9 percent sales gain in December, which was one of the weaker months in its turnaround in 2012. The company said it sold 2.08 million vehicles in the United States for the full year, which was a 26.6 percent gain over 2011. Its three top-selling vehicles — the Corolla compact car, Camry sedan and Prius gas-electric hybrid — accounted for nearly half of its overall sales for the year.

Analysts said Toyota appeared poised to outperform the overall market this year as well.

“Fresh products like the all-new RAV4 S.U.V. should help keep the momentum going,” said Jessica Caldwell, an analyst with the car research site

Honda ended the year on a high note, reporting a 26.2 percent jump in sales in December in the United States. Its bellwether cars, the Accord and Civic, led the way, each with increases of more than 60 percent. For the year, Honda said it sold 1.14 million vehicles, a 24 percent gain from 2011.

Other automakers had mixed results. Nissan said its December sales dropped 1.6 percent, but the company ended 2012 with a 9.5 percent gain for the year.

Volkswagen closed the year with another banner month. The German automaker reported a 29.9 percent gain for December and a 30.6 percent increase for the full year.

Article source:

Homebuilding Permits Rise, Exceeding Forecasts

The agency said building permits increased 3.6 percent to a seasonally adjusted annual rate of 899,000 units, the highest level since July 2008. That was well above economists’ expectations for a rate of 875,000 units.

In contrast, construction starts fell 3 percent to a rate of 861,000 units. That came after three consecutive months of solid gains and a three-month moving average that showed a firming trend.

“The trend is definitely up. Housing is going to make a small contribution to economic growth in 2012, and I would expect that homebuilding will continue to improve through 2013,” said Gus Faucher, a senior economist at PNC Financial Services in Pittsburgh.

While last month’s decline in groundbreaking prompted some economists to trim already meager growth forecasts for the fourth quarter, homebuilding is expected to add to economic growth this year for the first time since 2005.

In the 12 months through November, housing starts were up 21.6 percent, while permits gained 26.8 percent.

A separate report from the Mortgage Bankers Association showed that demand for home loans fell last week as mortgage rates ticked higher. Applications for loans to buy a home rose in each of the previous five weeks.

Though residential construction accounts for only about 2.5 percent of gross domestic product, economists estimate that for every single-family home built at least three full-time jobs are created.

Last month, permits to build single-family homes dipped 0.2 percent to a 565,000-unit pace. Permits for multifamily homes increased 10.6 percent to a 334,000-unit rate, reflecting buoyant demand for rental apartments.

“Longer term, we may have seen a shift in psychology, which is putting an extreme pressure on builders to provide multifamily homes. Young families are no longer clamoring to buy,” said Lindsey M. Piegza, an economist at FTN Financial in New York.

Article source:

Housing Starts Are Higher, But Analysts Are Cautious

Builders broke ground at a seasonally adjusted annual rate of 629,000 units in June, a rise of more than 14 percent compared with the previous month and a rate that was 16.7 percent higher than June 2010, the Department of Commerce reported.

It was the highest since January, when construction starts came in at a 636,000-unit annual rate.

The numbers are used as an indicator of future economic activity because of their implications for consumer spending, hiring, housing inventory, prices and other factors.

But the data is also volatile, subject to seasonal and other influences. A report on the statistics from Capital Economics economists said that the June survey reflected the severe weather in the previous months.

Last month’s increase “is not the start of a significant and sustained surge in home building,” the report said. “Instead, it reflects a rebound in activity after the unusually severe tornados and floods depressed starts in both April and May.”

The rate for construction starts on single-family homes was 453,000 in June, up 9.3 percent from May, while the rate for buildings with five units or more was 170,000, up 31.8 percent, the report said.

The report also said that permits for new construction, an indicator of future activity, rose by 2.5 percent from May to a seasonally adjusted rate of 624,000 in June. It was up 6.7 percent compared with June 2010.

Within that category, permits for multifamily units rose 6.9 percent to a 217,000 annual rate, the highest level since October 2008. The category was up in the South, West and Midwest, but down in the Northeast.

“For once in a long time, there was some good news in this report,” said Patrick Newport, an economist at IHS Global Insight. “The market for multifamily homes is coming back to life — very slowly — but the foundations are in place.

“But this is partly because the single-family market is falling so badly people are inclined to rent,” he added.

The survey also showed that completion of new homes took place at a rate of 535,000, which was 1.7 percent higher than in May. With a glut of new homes already on the market, adding to the inventory would tend to dampen prices, economists said.

“The addition of new supply to the housing market isn’t really constructive insofar as housing prices are concerned, but any uptick in new-home construction should offer some relief on the employment front,” said Kevin H. Giddis, the executive managing director and president for fixed-income capital markets at Morgan Keegan Company, in a research note.

Article source:

Industrial Output and Housing Starts Fell in April

Industrial output was flat in April as the earthquake in Japan in March interrupted the supply of parts to auto makers, a Federal Reserve report said on Tuesday.

The report added to negative economic data after the Commerce Department said housing construction and permits for new construction also declined in April.

Factory production fell 0.4 percent in April, its first decline in 10 months, the Fed said. Excluding motor vehicles and parts, factory production rose 0.2 percent in April.

Manufacturing makes up almost 75 percent of U.S. industrial production.

Analysts had expected a 0.4 percent rise in overall output, which was buoyed by increases of 0.8 percent in mining and 1.7 percent in utilities.

Total industrial production is 5 percent above its year-ago level, the Federal Reserve said.

Capacity use, a measure of how close firms are to running their facilities at maximum capability, fell unexpectedly to 76.9 percent in April from a downwardly revised 77 percent in March. Analysts were expecting capacity use to rise to 77.6.

Housing starts and permits for future home construction fell in April as an overabundance of homes on the market discouraged builders from taking on new projects.

The Commerce Department said on Tuesday housing starts dropped 10.6 percent to a seasonally adjusted annual rate of 523,000 units. March’s starts were revised up to a 585,000-unit pace from the previously reported rate of 549,000 units.

Economists polled by Reuters had forecast housing starts rising to a 568,000-unit rate. Compared with April of last year, residential construction was down 23.9 percent, the largest decline since October 2009.

Residential construction is being crowded out by an oversupply of used homes on the market — foreclosed properties in particular, which sell well below their value.

Home builders’ sentiment was flat in May, the National Association of Home Builders said on Monday.

Though builders expected a modest improvement in sales during the spring, they expected conditions to weaken in the next six months.

Groundbreaking last month was depressed by a 24.1 percent tumble in multifamily homes, a volatile category where starts for buildings with five or more units dropped 28.3 percent. Single-family home construction fell 5.1 percent.

New building permits dropped 4 percent to a 551,000-unit annual pace last month. April’s permits were revised down to a 574,000-unit rate while economists had expected overall building permits in April to remain unchanged at the previously reported 585,000-unit pace.

Permits were held down last month by an 8.8 percent decline in the multifamily segment. Permits to build single-family homes slipped 1.8 percent.

New home completions rose 4.1 percent to 554,000 units in April.

Article source: