Construction of US single-family houses in April dropped to the lowest level in 17 years, even as building of condominiums and townhouses rebounded.
Builders broke ground on 692,000 single-family homes at an annual rate, down 1.7 per cent from March and the fewest since January 1991, the Commerce Department said today in Washington.
Total starts jumped 8.2 per cent to a 1.032 million pace that was higher than forecast as construction of multi-family units increased 36 per cent following a 35 per cent drop in March.
Lower prices and bigger incentives have yet to revive demand for houses, indicating builders will need to come up with even more discounts to attract buyers.
Stricter lending rules, job losses and growing pessimism about the economy signal sales will not rebound quickly.
"Buyers are asking: `Why buy now when I can buy six months from now at a lower price?" Avery Shenfeld, a senior economist at CIBC World Markets in Toronto, said before the report.
"There's still a clearing out of inventory of unsold homes that needs some further months to run."
Building permits, a sign of future construction, rose 4.9 per cent to a 978,000 pace, reflecting gains in both single- and multi-family units.
Bloomberg