Single-family housing starts jumped 10% in April as builders rushed to meet demand from buyers seeking to take advantage of the expiring Federal homebuyer tax credit.
The U.S. Census Bureau reported that single-family housing starts rose to a seasonally adjusted annual rate of 593,000 in April, up from a 538,000 rate in March. On a sequential basis, construction activity rose 18% in the Midwest, 15% in the South, 5% in the Northeast but fell 5% in the West. Overall, single family housing starts rose 54% from April 2009.
The spike in activity caused the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index to rise three points to a reading of 22 in May — its highest showing since August 2007.
"Builders are hopeful that the solid momentum that the tax credits initiated will continue even now that those incentives are gone," said NAHB chairman Bob Jones.
The homebuyer tax credit expired April 30, but buyers have until June 30 to close and qualify for the credit.
A California tax credit for $10,000 for new home purchases is on the verge of expiration.
Builders broke ground on 68,000 multifamily units in April, down 24% from March.