Housing starts climbed 13.2% in April to a 1.07 million annualized rate following March’s 947,000 pace, the Commerce Department reported.
The median estimate of 79 economists surveyed by Bloomberg News called for 980,000. Permits for future projects increased, a sign activity might accelerate in coming months.
A recent drop in borrowing costs and a loosening of credit conditions are poised to lure more buyers into the market and lift demand for builders.
“With consumer confidence improving, job growth, support from stock markets, credit availability expanding, we’ll start to see that reflected in housing starts numbers and home sales numbers,” said Robert Dye, chief economist at Comerica Inc. “We’re going to see a little bit more momentum in housing.”
Building permits climbed 8 % to a 1.08 million annualized pace. They were projected to rise to 1.01 million, according to the Bloomberg survey median.
The increase in housing starts was dominated by multifamily construction, such as condominiums and apartment buildings, which increased almost 40% to a 423,000 annual rate from 303,000 in March.
Work on single-family properties rose 0.8% to a 649,000 rate in April from 644,000 the prior month.