You choose, we deliver
If you are interested in this story, you might be interested in others from The Journal Gazette. Go to www.journalgazette.net/newsletter and pick the subjects you care most about. We'll deliver your customized daily news report at 3 a.m. Fort Wayne time, right to your email.

Business

  • Why not warranties on hips, knees?
    When an automaker recalls defective brakes or air bags, the manufacturer’s warranty covers the costs of removing and replacing them.
  • Business at a glance
    Jai Juice, a juice bar and cafè, has opened at 1301 Lafayette St. in Fort Wayne.
  • Submissions
    Send items to Business News, The Journal Gazette, 600 W. Main St., Fort Wayne, IN 46802. Information may also be faxed to 461-8893 or emailed to lisagreen@jg.net.
Advertisement
Associated Press
A builder works on a home in northwest Chicago. A sharp gain in April construction was attributed to the apartment sector.

Homebuilding jumps 13.2%

April gains tied to apartment rentals rather than homes

– U.S. home construction surged in April to its highest pace in five months. Almost all that increase came from the volatile apartment sector, a sign that Americans are still struggling to buy single-family homes.

The Commerce Department said Friday that builders started work on 1.07 million homes at a seasonally adjusted annual rate in April, up 13.2 percent from March. The gains were driven by a 42.9 percent jump in the construction of apartments and condominiums.

The rate of building single-family homes rose just 0.8 percent.

The gains for apartment building point to an economy where more Americans rent instead of purchasing a home. After the housing bust and last recession, Americans have been coping with flat wages and job insecurity, making it difficult to save for a down payment.

The home ownership rate was 64.8 percent at the start of the year, down from a peak of 69.2 percent during 2004.

Homebuilding has yet to fully rebound during the nearly five-year recovery. That has deprived the economy of a traditional source of growth because each single-family home built creates three jobs and generates $90,000 in tax revenue, according to the National Association of Homebuilders.

Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said the April construction numbers are “consistent with more strength in rental demand than home sales.”

Most of the April gains in multifamily housing were concentrated in the Northeast and Midwest, regions that are bouncing back from the harsh winter where snow and freezing temperatures halted construction.

Applications for building permits, a gauge of future activity, rose 8 percent to an annual rate of 1.08 million.

The gains in permits also came almost exclusively from apartments and condominiums.

Advertisement