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Published: Wednesday, 5/20/2009

Housing market gets boost


WASHINGTON - A modest rebound in single-family home construction nationwide in April raised hopes yesterday that the three-year slide in housing could be bottoming.

But with the supply of unsold homes bulging, foreclosures rising, and prices falling, no broad recovery is expected until next spring at the earliest.

The U.S. Commerce Department said construction of new homes and apartments fell

12.8 percent last month to a seasonally adjusted annual rate of 458,000 units - the lowest pace on records going back 50 years. Building permit applications dropped 3.3 percent to an annual rate of 494,000, the lowest on record.

All of last month's weakness was in the volatile multifamily segment.

Single-family construction and permits both rose, a signal that this bigger sector is starting to stabilize. Construction of single-family homes rose 2.8 percent to an annual rate of 368,000, following a 0.3 percent gain in March and no change in February. Building permits for single-family homes were up 3.6 percent to a rate of 373,000 last month.

Analysts said apartment construction is being hurt by a glut of condominiums on the market and by tightening credit for commercial real estate.

The number of unsold homes on the market at the end of March fell 1.6 percent from a month earlier to 3.7 million, not including new homes, according to the National Association of Realtors.

"Home building conditions remain weak," Paul Dales, U.S. economist for Capital Economics, said. "The excess supply of new homes for sale is still high and heavy discounts on foreclosed properties have made new homes less appealing. Any rebound in starts will be modest."

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