Housing starts decline again as apartment financing dries up

Due largely to lack of financing for all types of commercial properties -- including apartments -- housing starts fell during April by nearly 13% from March levels to just 458,000 units -- the lowest seasonally adjusted level noted in half a century, although permits for single-family homes rose by 2.8%. On the plus side, such a low level of new construction for a country of over 300 million people will certainly help to clear out inventory levels. From the AP via L.A. Times:

Housing construction plunged to a record low in April as a steep drop in apartment building offset a rebound in single-family construction. Permits for new projects also hit a new low. The Commerce Department said today that construction of new homes and apartments fell 12.8% last month to a seasonally adjusted annual rate of 458,000 units, the lowest pace on records going back a half-century...

Economists had expected home construction and building permits to post modest increases in April as signs that the worst collapse in housing activity in the post-World War II period was drawing to a close. Even in last month's big decline, there were some signs of stabilization.

Construction of single-family homes rose 2.8 percent to an annual rate of 368,000, following a 0.3 percent gain in March and no change in February. The stability in single-family construction likely will be viewed as a hopeful sign that the three-year slide in housing could be bottoming out...

Housing construction fell 30.6 percent in the Northeast, the largest drop for any region. Housing starts dropped 21.4 percent in the Midwest and 21.1 percent in the South. The West was the only region showing strength with a 42.5 percent jump in housing starts. The National Association of Homebuilders reported Monday that its survey of builder confidence increased for the second straight month in May, reflecting growing optimism on the part of many builders...

But analysts cautioned that the wave of foreclosures hitting the market means that builders still face tough competition to sell new homes...