- The Washington Times - Tuesday, May 19, 2009

Housing construction dropped to a record low in April, surprising analysts and showing the industry remains a problem as the economy tries to recover from the recession.

The Commerce Department said Tuesday the construction of new homes and apartments fell 12.8 percent last month compared to March, the worst decline in roughly 50 years. The 458,000 new starts also was 54 percent less than in April 2008.

The agency said the construction of single-family homes increased by 2.8 percent compared to March, but record-low construction of apartments resulted in an overall drop, following a 0.3 percent gain in March.

In addition, the number of building permits in April decreased 3.3 percent compared to March. The 494,000 permits was roughly 50 percent less than in April 2008.

The monthly report follows the release Monday of the National Association of Home Builders-Wells Fargo Housing Market Index that showed builders are increasingly confident about the value of new, single-family homes in the housing market. The report helped the major U.S. markets gain 3 percent. The Dow Jones Industrial Average gained 235 points.

Still, analysts appear increasingly concerned about housing now that major U.S. banks appear to be stable.

Last week, the online company RealtyTrac reported the number of foreclosures nationwide increased by 1 percent in April compared to the previous month and by 32 percent compared to the same time last year. And the National Association of Realtors reported nearly 90 percent of metropolitan areas reported a decrease in the price of single-family homes during the start of 2009.

“There’s a fairly popular opinion that the housing market is now at the core of the [economy’s] problems,” Brian Lipps, a Charles Schwab & Co. vice president, said Monday.

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