Apartments help propel new home construction

A bit of good national housing news from the Associated Press that isn't applicable to much of Florida:

Construction of new homes posted the biggest increase in more than two years in April. While it was a rare spot of good news for the housing market, analysts said it's far too soon to declare an end to the prolonged slump.

The Commerce Department reported Friday that housing construction rose by 8.2 percent in April to a seasonally adjusted annual rate of 1.03 million units. Building of single-family homes continued to weaken, however. The growth came from a big jump in apartment construction.

Analysts predicted the surprising rebound in April would be temporary given the headwinds builders are still confronting, from slumping sales to soaring home foreclosures.

"It is definitely too early to uncork the champagne on the long and winding road to more-healthy housing-market conditions," said Brian Bethune, an economist at Global Insight. He said he did not expect housing activity to stabilize until the end of this year.

The prolonged slump in housing has been a major drag on the overall economy, raising worries that the country is in danger of falling into a recession. A second report Friday showed that consumer confidence as measured by the University of Michigan/Reuters survey fell to a 28-year low of 59.5 in early May, down from 62.6 in April. The drop was blamed in part on rising concerns about higher gas and food prices.

The strength in housing construction in April came entirely from a huge increase in apartment construction, which can be extremely volatile from month to month. Building of apartments, defined as two or more units, jumped by 36 percent to a seasonally adjusted annual rate of 340,000 units.

In the Tampa Bay area, despite a glut of rental condos, apartment construction has been fairly brisk. Hillsborough County has been the focal point, with 11 complexes under construction from Brandon to Tampa's Channelside to the Westshore business district.

Though Pinellas County had no active apartment projects as of the start of the year, 7 projects totaling 2,000 units are in the planning pipeline.

"Demand for rental housing is, in some respects, greater than ever," said Michael Slater, whose Tampa company Triad Research & Consulting specializes in the apartment industry. Thousands of people pushed out of homes by foreclosures often turn to apartments, Slater said.

The larger single-family sector dropped by 1.7 percent to an annual rate of 692,000 units. It was the 12th consecutive monthly decline and pushed single-family building activity to its lowest point in 17 years, since a severe housing slump in the early 1990s.

Comments

[David]

They need to build all these new apartments to house the people who lost their homes to the foreclosure mess. Most probably should have been in rentals in the first place, but were tricked by predatory lenders.

[alex]

Or by their own stupidity.

[Tino]

Oh, please. People still believe in the "predatory lender" myth?

Not reading the legal documents that you sign does not absolve you of the responsibilities.

[David]

I said most should have been in rentals in the first place. Meaning that they had no business looking for and buying homes that they could not afford. True they should have known their financial situation, and read the contracts. However just about everybody knows that plenty of lenders enticed buyers with unrealistic expectations and numbers to collect commissions.

[construction okotoks]

very interesting...rentals are really of big help!

[general contractor construction California]

construction is really booming nowadays...

[home remodeling va]

construction is also evolving nowadays adapting to the changes in the environment...

[paving contractors california]

as time goes by different industries really develop...its a good thing that construction is improving...