Housing Starts Rise For Second Consecutive Month

Construction of new homes rose for a second consecutive month during March, providing at least the glimmer of hope that the worst of the housing market downturn may be over.

The Commerce Department said Tuesday that home builders started work on 1.518 million new homes at a seasonally adjusted annual rate in March - marking an increase of 0.8 percent.

In February, housing construction had risen by 7.6 percent.

Across the U.S., mortgage rates remained low, and building permits, which signal future construction plans, also rose 0.8 percent, the first advance in three months.

The gain in building permits was viewed as possibly signaling that the worst of the severe slump in housing may be coming to and end.

However, home loan applications have declined for four consecutive weeks. It will surely be interesting to see tomorrow’s weekly Mortgage Bankers Association survey data on that subject.

Last month’s permits figure was off 25.9 percent from the March 2006 pace of 2.085 million units. Housing completions were off 25.9 percent in March from a year ago at a 1.632 million unit pace — the biggest drop since June 1982.

The middling housing market data comes a day after a private survey of home builders showed that they took a gloomy view of the market in April.

The National Association of Home builders/Wells Fargo Housing Market Index dropped to 33 this month from 36 in March. That was the second consecutive monthly fall and its lowest since December when it also came in at 33.

Readings below 50 indicate more home builders view market conditions as poor rather than favorable, so a score of 33 indicates moderate to low home builder confidence.

SOURCE: USA Today