Construction boom continues
The American housing market is still booming with construction of new homes rising 0.2 per cent in May as builders rushed to meet strong demand fuelled by low mortgage rates.
The May increase left construction of new homes and apartments at an annualized rate of 2.009 million units, up from 2.005 million units in April, when construction activity jumped by 9.4 per cent.
While the May increase was slightly below the 0.6-per-cent gain that had been forecast, economists blamed the temporary effect of unusually wet weather in Florida and other parts of the South.
They noted that permits for new construction, an indicator of future strength, came in at a solid annual rate of 2.05 million units.
“We still have a red-hot housing market,” said David Seiders, chief economist of the National Association of Home Builders.
“Surveys of both lenders and builders are showing tremendous ongoing strength with little or no hints that anything is starting to fall.”
Brian Bethune of Global Insight said the current backlog of building permits should translate into housing construction moving “at full bore for several more months.”
The strength in homebuilding reflects sales that climbed to record highs in April as mortgage rates fell.
The Associated Pres