Housing Construction Up 2.6 Percent In April

Enlarge Damian Dovarganes/AP

The increase in housing starts, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may be starting to recover.

The increase in housing starts, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may be starting to recover.

U.S. builders began work on more homes last month, evidence that the battered housing market is slowly healing.

The Commerce Department said Wednesday that builders broke ground at a seasonally adjusted annual pace of 717,000 homes in April from March. That's 2.6 percent more than March's total, which was revised higher. Construction rose for both single-family homes and apartments.

Building permits, a gauge of future construction, fell last month from a 3 year high to a seasonally adjusted annual rate of 715,000. But that was because of a 23 percent drop in the volatile apartment category. Permits for single-family homes rose almost 2 percent.

Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. But the increase, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may finally be starting to recover nearly five years after the housing bubble burst.

Builders have grown more confident since last fall, in part because more people have expressed interest in buying a home. In May, builder optimism rose to the highest level in five years, according to the National Association of Home Builders/Wells Fargo builder sentiment index.

Seasonally adjusted annual rate, in thousands

Homebuilders reported improving sales and higher traffic from prospective buyers, the survey showed. A gauge measuring confidence in sales over the next six months also rose to 34 from 31.

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Housing Construction Up 2.6 Percent In April