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Housing Starts Rise, Builders Remain Cautious

Housing starts were at a seasonally adjusted annual rate of 532,000 in May, up 17.2 percent from the April estimate of 454,000, but 45.2 percent below the 971,000 homes started in May 2008, according to the latest figures released by the U.S. Commerce Department.

Permits for new construction rose 4.0 percent in May to a seasonally adjusted annual rate of 518,000 up from 498,000 in April, but they are 47.0 percent below the May 2008 estimate of 978,000.

Single-family home builders remain concerned about the current state of the economy and housing market, according to the latest NAHB/Wells Fargo Housing Market Index (HMI). The index gauges builders’ perceptions of current single-family home sales, sales expectations for the next six months, and traffic of prospective buyers.

“As expected, the housing market continues to bump along trying to find a bottom,” said NAHB chief economist David Crowe. “Meanwhile builders are taking their cue from consumers, who remain uncertain about the economy and their own situation. Builders are also finding it difficult to complete a sale because customers cannot sell their existing homes.”

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