Home Construction Rises but Permits Decline

Washington, DC, May 18, 2010--Home construction rose more than expected in April but new building permits fell significantly.

The results show builders ramped up to meet demand from buyers seeking to take advantage of federal tax incentives, but are now scaling back their plans.

Building permits fell 11.5% to an annual rate of 606,000, the lowest since October 2009, the Commerce Department said Tuesday.

Construction of new homes and apartments rose 5.8% last month to a seasonally adjusted annual rate of 672,000. The increase was from an upwardly revised March level of 635,000.

The result was the highest since October 2008 and was driven by a 10 percent increase in the single-family market. Housing construction is now up more than 40% from the bottom in April 2009 but down 70% from the peak in January 2006.