Housing starts surprise with an 11 percent climb

WASHINGTON -- May 17, 2005 -- U.S. housing starts rose 11.0 percent in April, again surprising experts who continue to expect a slowdown in home sales. Building permits, an indicator of future housing starts, also rose. The change follows a slowdown reported last month.

Housing starts rose for both single-family homes and multifamily housing, according to the U.S. Commerce Department. April housing starts ticked upward to 2.038 million units, compared to March's 1.836 million units, which was revised downward. Economists on Wall Street had predicted a rise in home starts, but only by about 7.8 percent.

Single-family home starts rose 6.3 percent to 1.635 million, following a drop of 14.9 percent in March. Multifamily housing starts -- housing with two or more units -- surged 35.2 percent in April following a 29 percent drop in March.

Building permits rose 5.3 percent to 2.129 million units, a significant increase over Wall Street analyst predictions of a modest 0.6 percent increase.

The greatest strength in new housing came in the South, where construction rose 25 percent in April for its biggest monthly increase since July 1995 when it hit 29.5 percent. In the Midwest, starts rose 6.2 percent; in the West, they rose 2.5 percent. Housing starts fell in the Northeast by 17.8 percent.