WASHINGTON -- U.S. housing starts jumped in April and building permits hit their highest level in nearly six years, offering hope that the troubled housing market could be stabilizing.
The Commerce Department said Friday groundbreaking increased 13.2 percent to a seasonally adjusted annual pace of 1.07 million units, the highest level since November 2013. All four regions of the country reported increases.
Starts rose by a revised 2 percent in March, compared to a previously reported 2.8 percent gain for that month.
Economists polled by Reuters had forecast starts rising to a 980,000-unit rate last month. Compared to April last year, groundbreaking was up 26.4 percent.
The dollar pared losses against the yen, while U.S. Treasury debt yields rose after the data.
The housing market recovery stalled as a combination of higher mortgage rates and rising property prices, against the backdrop of stagnant wage growth, made housing less affordable for many Americans. A cold winter also weighed on activity.
The residential sector contracted in the first three months of 2014, declining for a second consecutive quarter.
%VIRTUAL-article-sponsoredlinks%With the multifamily sector segment continuing to drive residential construction, housing is unlikely to contribute to economic growth this year for the first time since 2010.
The weak housing market recently has caught the attention of U.S. Federal Reserve Chair Janet Yellen, who early this month told lawmakers that it could undermine the economy.
Last month, groundbreaking for single-family homes, the largest segment of the market, rose 0.8 percent to a 649,000-unit pace. Starts for the volatile multifamily homes segment surged 39.6 percent to a 423,000-unit rate.
Groundbreaking for buildings with five or more units hit the highest level since January 2006.
Permits to build homes jumped 8 percent to a 1.08-million unit pace in April, the highest since June 2008. Economists had expected permits to rise to a 1.01-million unit pace. Compared to April last year, permits were up 3.8 percent.
Permits for single-family homes rose 0.3 percent to a 602,000-unit pace.
Single-family homes permits continue to lag groundbreaking, suggesting that single-family starts could decline in the months ahead to bring them in line with permits.
Permits for multifamily homes soared 19.5 percent to a 478,000-unit rate in April. Multifamily permits are running well ahead of starts, which could indicate delays in getting projects started. Permits for buildings with five or more units jumped 21.8 percent to their highest level since June 2008.
The multifamily segment is being driven by demand for rental units. Builders, however, have complained about rising material costs as well as shortages of lots and skilled labor.
House Rich: Neighborhoods With the Biggest Price Jumps
Housing Gets a Boost as Construction, Permits Rise Sharply
Year-over-year gain: 21.5%
Median sale price, Jan. 2013: $224,450
Median sale price, Jan. 2014: $272,750
Residents enjoy hundreds of nearby hiking trails, as well as indoor culture at the Fine Arts Center and the Colorado Springs Philharmonic.
Year-over-year gain: 22%
Median sale price, Jan. 2013: $318,375
Median sale price, Jan. 2014: $388,500
This neighborhood, bounded by the Schuylkill River and 20th Street, and by South Street and Christian Street, was viewed as a slum in the 1970s, when Philadelphia's Redevelopment Authority took over abandoned properties.
Year-over-year gain: 24.2%
Median sale price, Jan. 2013: $516,450
Median sale price, Jan. 2014: $641,500
Magnolia covers 4 square miles, making it the second-largest Seattle neighborhood by area. It features a lighthouse built in 1881 and is home to Seattle's largest park, at 534 acres.
Year-over-year gain: 32.1%
Median sale price, Jan. 2013: $210,446
Median sale price, Jan. 2014: $277,898
Paradise Valley, in the heart of the Scottsdale-Phoenix area, gets an average 294 days of sunshine a year -- hence, the more than 200 golf courses.
Year-over-year gain: 32.2%
Median sale price, Jan. 2013: $344,750
Median sale price, Jan. 2014: $455,835
The Washington Post listed Sunset Hills among "the shortest commute" category of Virginia neighborhoods, with an average commute time of just over 21 minutes. And Dulles International Airport is about six miles away.
Year-over-year gain: 44.5%
Median sale price, Jan. 2013: $247,735
Median sale price, Jan. 2014: $357,900
This once-seedy area has become hot in recent years. It's packed with art galleries and chic retail shops, as well as new upscale bars and restaurants next to venerable family-owned cafeterias.
Year-over-year gain: 46.9%
Median sale price, Jan. 2013: $284,750
Median sale price, Jan. 2014: $418,250
Brighton, once the center of New England's cattle trade, is in the northwest corner of Boston, on the Charles River. The Brighton Branch Library is Boston's first renovated LEED Green Building. The Brighton Police station is shown here.
Year-over-year gain: 47.5%
Median sale price, Jan. 2013: $223,175
Median sale price, Jan. 2014: $329,100
South Loop joins a number of other once-blighted neighborhoods on this list that have been redeveloped and are now hot. The site of former rail yards, it was known for many years more for its vices (as in brothels, burlesques) than its residential virtues.
Year-over-year gain: 48.7%
Median sale price, Jan. 2013: $241,000
Median sale price, Jan. 2014: $358,450
Also: Fairgrounds, San Jose (41.4%); La Jolla, San Diego (40%); Woodland Hills, Los Angeles (37.5%); Southwest Anaheim, Anaheim (35.2%); Berryessa, San Jose (34.4%).
Newhall, the southernmost and oldest district of Santa Clarita, was the first permanent Anglo settlement in the valley. Ranches-turned-film studios dot the area, including the Melody Ranch, which was once owned by Gene Autry. The ranch hosts the annual Santa Clarita Cowboy Festival.
Year-over-year gain: 48.8%
Median sale price, Jan. 2013: $504,250
Median sale price, Jan. 2014: $750,275
This is the most affluent neighborhood in Charlotte; the median income is $79,737, according to Zillow. That compares with a median of $46,975 for Charlotte. A high point of the area is the Duke Mansion, built in 1915 by tobacco magnate James Buchanan Duke.
Year-over-year gain: 57.4%
Median sale price, Jan. 2013: $167,450
Median sale price, Jan. 2014: $263,615
People who live here, according to classifications Zillow uses to characterize residents, are likely to be: Corporate Climbers, Multi-lingual Urbanites or in a category called "Bright Lights, Big City," which Zillow uses to describe "singles ranging in age from the early 20s to mid-40s who have moved to an urban setting."
Year-over-year gain: 97.3%
Median sale price, Jan. 2013: $668,250
Median sale price, Jan. 2014: $1,318,301
New York City’s 92-acre planned community includes areas built on more than 3 million cubic yards of soil and rock, some of which was excavated during the construction of the World Trade Center.
Bloomberg ranked neighborhoods in U.S. cities based on the year-over-year increase in median home sale prices from January 2013 to January 2014. Percentage increases were based on Zillow calculations of median sale prices of all home types and calculated only for neighborhoods with at least 10 sales per month. Only neighborhoods with median home sale prices of at least $250,000 in January 2014 were included. Data were rounded.