Rented optimism

3 June 2014 By Daniel Indiviglio

Multi-residence buildings now account for 40 pct of new construction. That may sound promising. But they’re cheaper to erect than standalone homes and are usually rented out. There’s little here for mortgage lenders, most big builders or the economy to get excited about.

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Construction spending in the United States increased 0.2 percent in April to the highest level since March 2009, the Commerce Department announced on June 2. That was weaker than both the March increase and economists’ expectations, which were both 0.6 percent. The additional outlays in April were led by public construction spending, which rose 0.8 percent. Spending on private construction was flat for the month.

U.S. pending home sales, a measure indicating new contracts signed to buy previously owned homes, rose 0.4 percent in April, the National Association of Realtors reported on May 29. That missed economists’ expectations of 1 percent. Growth was also slower than March’s 3.4 percent tally. April’s result also represents a decline of 9.2 percent compared to April 2013.

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