New home construction jumped in April, signaling growth in the nation’s housing market.
Builders started construction on new homes and apartments at a seasonally adjusted annual rate of 717,000 units. That was a 2.6% improvement over March and 29.9% above April 2011.
Single-family homes accounted for a significant chunk of that total with a rate of 492,000 units.
Ian Shepherdson, chief U.S. economist for High Frequency Economics, said that housing starts would not continue to rise quite so strongly in coming months. New construction has been lagging behind the number of permits builders have pulled in recent months. April's increase was a case of catching up, he said.
Nevertheless, the uptick was a sign that housing is on the mend, he wrote in an analyst note.
“Home builders are reporting stronger demand,” he wrote. “And while rental demand means the multi-family sector is much stronger than single-family … that will change as the labor market improves further.”