Home construction up, building permits fall

By ALAN ZIBEL AP Real Estate Writer

WASHINGTON (AP) - Construction of new homes rose more than expected in April, but new building permits fell sharply, signaling that the building industry's rebound could be short-lived.

The Commerce Department says construction of new homes and apartments rose 5.8 percent last month to a seasonally adjusted annual rate of 672,000. The results were the highest since October 2008 and were driven by a 10 percent increase in the single-family market.

Analysts surveyed by Thomson Reuters had expected construction to rise more modestly to a rate of 650,000.

Building permits, a gauge of future activity, sank 11.5 percent to an annual rate of 606,000, the lowest since October 2009. Analysts were expecting a slight dip to a rate of 680,000.