The Real Deal Miami

Construction levels up in May

June 16, 2009 04:51PM

A sign that the economy might be stabilizing has emerged as
construction of new homes rose 17.2 percent in May to 532,000 units from
April’s
record low of 454,000 units, the Commerce Department said.
Despite the increase, the Producer Price Index, which measures
wholesale prices, showed an uptick of 0.2 percent between April and
May, slightly
below analysts’ predictions of a 0.6 percent rise. But, as construction
levels and mortgage rates rise, a sustained rebound in home
construction isn’t expected until next spring due to the large amount
of unsold and foreclosed homes that remain on the market. According to
data from the National Association of Realtors, there is still a
10-month supply of new and existing homes, which will delay a full
recovery in the housing sector.