US home construction picks up

WASHINGTON (AFP) — US homebuilding showed a surprisingly strong jump in April, signaling a ray of hope amid the rubble of the worst housing slump in decades, according to government data released Friday.

Housing starts and permits hit their highest levels since February, and new home construction rebounded from a 17-year low in March, the Commerce Department data showed.

Starts rose 8.2 percent in April from March to an annual rate of 1.032 million units. It was the strongest gain since January 2006 and sharply higher than analysts' consensus forecast for a cutback to 940,000 units.

Construction permits, a bellwether of future activity in the housing sector, climbed a robust 4.9 percent in April to 978,000 units. That, too, soundly topped analyst expectations of 912,000 units.

Analysts said the data was an encouraging sign that the housing market finally may be starting to stabilize after the collapse of a real-estate bubble in 2006.

With the housing slump at the root of the economy's slowdown, finding a floor could give the Federal Reserve more room to pause in its recent interest rate-slashing campaign.

But analysts cautioned that any improvement was starting from relatively depressed levels.