Construction of Single-Family Homes Rises

Washington, DC, Oct. 20, 2009--Construction of new homes edged up slightly in September, helped by a rebound in single-family construction.

However, applications for building permits fell by the largest amount in five months, a worrisome sign for future housing work.

The Commerce Department said Tuesday that construction of new homes and apartments rose 0.5 percent in September to a seasonally adjusted annual rate of 590,000 units. That was a weaker showing than the 610,000 economists had expected.

New applications for building permits, considered a good sign of future activity, fell 1.2 percent in September.

That's the biggest decline since a 2.5 percent drop in April and underscored worries the fledgling housing revival could be derailed by rising unemployment and the expiration on Nov. 30 of the government's $8,000 tax credit for first-time home buyers.

The 0.5 percent rise in overall construction in September followed a 1 percent drop in August that was revised down from an initial estimate of a 1.5 percent gain.

Construction of single-family homes rose 3.9 percent last month to an annual rate of 501,000 units, reversing a 4.7 percent drop in August. Multifamily construction, a much smaller and more volatile segment, posted a 15.2 percent drop following a 20.7 percent rise in August.