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US home construction slows unexpectedly in April
[WASHINGTON] Construction of new US homes dipped in April to its slowest pace in five months, a second consecutive decrease, the Commerce Department reported Tuesday.
Analysts had been expecting an uptick in the pace of construction after March, when a winter storm in the Northeast likely held down activity among homebuilders.
Industry observers say supply has not kept pace with demand, with the current US economy producing an exceedingly tight market and rising prices.
Rising wages and steady job creation have seen more buyers enter the market, driving up prices.
Analysts point to the high cost of construction, demand for rentals and the large share of suitable housing held by investment firms as reasons for the lack of supply.
Total housing starts were at a seasonally adjusted annual rate of 1.172 million, 2.6 per cent below March's downward-revised figure and the slowest expansion since November.
A consensus forecast among analysts had instead called for a 1.8 per cent increase.
In the Northeast, construction fell 37.3 per cent but this reading can be volatile.
The April rate was still a modest 0.7 per cent above April of 2016.
Building permits also fell below analyst expectations at an annual rate of 1.229 million, down 2.5 per cent from the prior month - still a solid 5.7 per cent above April of last year.
A consensus forecast had called for a slight monthly increase of 0.4 per cent.
Buildings with five or more apartments rose for the second straight month, adding 1.5 per cent to an annual rate of 403,000 - suggesting the hot rental market in many cities may still be a driver of construction.