Housing starts and permits rise – but not in N.E.

WASHINGTON – New housing starts nationwide and new permits for future construction both rose last month compared with March, hinting at a possible turnaround for the ailing housing industry, according to the joint report issued today by the U.S. Census Bureau and U.S. Department of Housing and Urban Development.

Builders broke ground on new dwellings in April at a seasonally adjusted rate of 1.032 million units per year, an increase of 8.2 percent from the previous month’s revised rate of 932,000, but a decline of 34.3 percent from the revised April 2007 estimate of 1.489 million.

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Analysts had expected housing starts would fall to an annual pace of 939,000, based on a survey of 73 economists by Bloomberg News. (Their estimates ranged from 875,000 to 1 million units per year.)

Single-family housing starts continued to decline, falling 1.7 percent from their March level to an April pace of 4.0 percent compared with March to an April pace of 692,000 units per year –the slowest since January 1991 – that was 42.2 percent below the year-ago level. Multi-family starts surged, however, with new construction of structures with five or more units rising 40.5 percent compared with March to 326,000 units per year or 28.9 percent above the year-ago level.

In the Northeast, new residential construction fell 12.7 percent last month to an annual pace of 89,000 units per year, or 45.4 percent below the 163,000 units per year of April 2007. Housing starts rose compared with March in the Midwest (24.4 percent), the West (18.5 percent) and the South (3.6 percent), but continued to lag year-ago levels.

Housing permits – an indicator of future construction – were issued last month at a seasonally adjusted rate of 978,000 units per year, an increase of 4.9 percent from the revised March rate of 932,000. That defied analysts’ expectations of a decline to 915,000 per year in April. Compared with April 2007’s revised level of 1.489 million permits per year, however, the pace fell 34.3 percent.

Single-family authorizations nationwide rose 4.0 percent compared with March, to an April rate of 646,000, but remained 40.1 percent below their level a year ago. Authorizations for large multi-family structures rose fastest: Permits for buildings with five or more units rose 7.3 percent over the month to 294,000 units per year, but remained 16.0 percent below their April 2007 level.

In the Northeast, total housing permits fell 1.8 percent compared with March to a 109,000-unit-per-year pace that was 32.7 percent below the year-ago level. Housing authorizations also fell in the South (-1.8 percent) but rose last month in the West (+11.9 percent) and the Midwest (+27.0 percent); permits lagged year-ago levels in every region.

“The trends are horrific,” Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y., told Bloomberg News. Adam York, an economist at Wachovia Corp. in Charlotte, N.C., added: “There may be signs that we are getting close to a bottom, but we don’t think we’re there yet. The housing market still has a ways to go towards working off its problems.”

Additional information, including the full New Residential Construction Report from the U.S. Commerce Department’s Census Bureau and the U.S. Department of Housing and Urban Development, is available at www.census.gov .