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Housing Starts Rise Unexpectedly

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New-home construction increased 8.2 percent in April, offering signs of life in a deeply troubled sector, the Commerce Department reported on Friday. But most of the gain came in multifamily housing, masking further bad news on single-family homes, whose groundbreakings dropped to a 17-year low.

Housing starts rose to a seasonally adjusted annual rate of 1.032 million. Construction of multifamily units surged 36 percent, compared with a 35 percent drop in March, a huge swing — and an average one in recent months, the agency said in a report.

While building permits were up 4 percent in both areas, ground was broken on 1.7 percent fewer single-family homes in April, from a seasonally-adjusted annual rate of 704,000 to 692,000.

There were varied reactions to the new figures, with one analyst telling Reuters that “it’s a nice upside surprise” and another telling Bloomberg News that the trends remained “horrific.”

Joel Naroff of Naroff Economic Advisors offered a pragmatic assessment in comments to The Associated Press. “While we may not yet have absolutely hit bottom,” he said, “it is beginning to look as if the end may be near.”

The markets were down slightly in early trading.

“The bump in starts owes entirely to multifamily dwellings,” Michael T. Darda of MKM Partners said. While the single-family figure was certainly bad news, he also said that it “indicates that the builders are rapidly taking supply off the market, which ultimately will lay the foundation for stabilization in the sector.”

The month-to-month figures may have been mixed, but the year-to-year comparisons left no doubt that housing was far from a full recovery. Overall housing starts plunged 30.6 percent compared with those in the month a year earlier, and permits sank by 34.3 percent.

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