U.S. Housing Construction Tumbles in April

May 17, 2011
Starts and building permits missed analysts' expectations.

Home construction in the United States plunged in April, official data showed Tuesday, underscoring the depth of the years-old housing crisis.

Housing starts tumbled 10.6% from March to a seasonally adjusted annual rate of 523,000, the Commerce Department reported.

The number widely missed the average analyst estimate of 563,000.

Building permits, a forward-looking indicator, also fell, by 4% from the prior month to a rate of 551,000, well below expectations.

For the month of March, which had shown a recovery by the two indicators from near-record lows in February, the Commerce Department revised the housing starts sharply higher and building permits sharply lower.

Both April indicators were dragged lower by a steep fall in the volatile multifamily sector, buildings with at least five units.

But the key single-family housing sector also weakened, with housing starts falling 5.1% and building permits down 1.8%.

The report underlined the deep crisis gripping the U.S. housing market since a price bubble burst five years ago, triggering a subprime crisis in 2007 that sent the global financial system into a tailspin.

"This is the latest in a lengthening string of disappointing reports from the housing industry, which confirms that the sorry state of a mortgage market populated with a large number of unresolved foreclosures continues to undermine normal home-building activity," said David Resler of Nomura Global Economics.

Copyright Agence France-Presse, 2011

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