The rate of new home construction fell 16.5 percent in the month of April, following a 7 percent increase in March, while the number of permits issued rose 14.3 percent, after declining by 3.9 percent in March, according to real estate market trends reported by the Commerce Department today.
New home construction took place at a seasonally adjusted annual rate of 853,000 in April, down considerably from the annual rate of more than 1.02 million for March, but 13.1 percent higher than the annual rate of 754,000 in April 2012, the Commerce Department reported.
The slump in new construction helped drag down stocks in morning trading, according to Bloomberg News, as the markets reacted to disappointing housing, employment and manufacturing data.
Building permits – a forward-looking indicator of real estate market trends – were issued at an annual rate of more than 1.01 million, an increase of 14.3 percent from the annual rate of 890,000 for March and 35.8 percent higher than the annual rate of 374,000 in April 2012.
Confidence among home builders rose in May, reversing months of declining confidence, according to real estate market trends reported yesterday by the National Association of Home Builders, a trade association based in Washington, D.C. The association’s Housing Market Index rose three points to a reading of 44 on improved perceptions of sales conditions, sales expectations and buyer traffic. Despite the increase, the index remains well below 50, a point that signals equal numbers of builders view real estate market trends as positive or negative.
Millionaire investors expect home prices to continue improving over the next one-to-two years. Click here to learn more.
U.S. home prices are forecast to rise by 2.5 percent in 2013, according to the analytics firm CoreLogic, and to keep rising by 3.9 percent a year over the next five years.
In other signs of improving real estate market trends, REITs – or real estate investment trusts – outperformed the S&P 500 Index in April. Click here to learn more.
Further indications of prevailing real estate market trends are due next week. The National Association of Realtors is scheduled to report existing homes sales data for April on Wednesday, and the Federal Housing Finance Authority will release its House Price Index for March on Thursday.