Builders ramped up construction of new homes in April, suggesting that the market remains solid despite sluggish economic growth at the beginning of the year.
Housing starts climbed 6.6 per cent seasonally adjusted annual rate of 1.17 million units, the Commerce department said. The increase makes up for much of March’s 9.4 per cent drop in starts, a decline that partially reflected the volatile swings in residential construction on a monthly basis.
“This was a decent report and shows that housing will continue to be one of the stronger pillars of the economy as long as rates stay relatively low and job growth takes place,” said Jennifer Lee, a senior economist at BMO Capital markets.
During the first four months of the year, home construction advanced 10.2 per cent. Applications for permits to build new homes, an indicator of future activity rose 3.6 per cent in April to an annual rate of 1.12 billion.
The residential market has yet to fully recover from the dramatic crash brought about by a flood of subprime mortgages nearly a decade ago. But builders expect customers to come back into the market as the home values rebound.
