U.S. Housing Starts Soared in May; Permits Also Rose

U.S. builders broke ground on more houses than forecast in May, offering a sign that the industry’s slump, now in its fourth year, may be approaching an end.

The 17 percent increase in housing starts to an annual rate of 532,000 followed a 454,000 pace the prior month, the Commerce Department said today in Washington. Building permits, an indicator of future construction, also rose more than estimated.

Lower prices and tax incentives are attracting buyers, potentially laying the groundwork for housing to rebound and reduce its drag on the economy. Still, rising unemployment is causing many Americans to hold off on big purchases and foreclosures continue to mount, so a sustained homebuilding recovery may take longer to emerge, analysts say.

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- Posted: 2009-06-16 10:09:26

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