Construction of new US homes rose unexpectedly in April and applications for new building permits also increased, official data shows.

The report could be a sign the gloom that has engulfed the US housing market is beginning to lift, analysts said.

The Commerce Department said housing construction rose by 8.2% in April to an annual rate of 1.03 million units thanks to a rise in apartment building.

Permits increased 4.9% to an annual rate of 978,000.

"We may not have seen the absolute bottom, but these figures strongly suggest that we are near US productivity beats forecasts ...
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Firings over Obama file breach ... the bottom," said Ken Mayland, president of Clearview Economics.

The gain represented a recovery after a steep slump in March building pushed activity to the slowest pace in 17 years.

It was the biggest monthly increase since a 14% rise in January 2006.

Economists had forecast that construction starts would fall to an annualised rate of 940,000.

However, analysts said the data was very volatile and did not mean that a fully-fledged recovery was underway.

"The more important turnaround in housing has to come from prices and the pace of buying in housing rather than starting new houses," said Josh Stiles, bond strategist and managing director at IDEAGlobal.

(BBC)

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