Multifamily Housing Construction Surges In April

"Home construction turned up unexpectedly in April and showed surprising vigor, making the biggest increase in two years. However, the increase was driven by a surge in multi-family housing, while single-family starts dropped.

Housing starts increased 8.2% to a seasonally adjusted 1.032 million annual rate, driven higher by a surge in apartment building construction, the Commerce Department said Friday. Starts plunged 13.8% in March to 954,000, the data showed; Commerce initially estimated March starts down 11.9% to 947,000.

Economists surveyed by Dow Jones Newswires expected April starts to drop by 1.4% to a 934,000-unit annual rate. The 8.2% increase was the largest monthly climb since a 14.0% jump in January 2006.

But year over year, housing starts were 30.6% below the level of construction in April 2007.

"The headline increase in starts means nothing; it is all due to a rebound in the hugely volatile, but essentially trendless, multi-family sector," said Ian Shepherdson of High Frequency Economics."