US housing construction rebounded more vigorously than expected in May from all-time lows, official data showed Tuesday, stoking hopes the real-estate crisis at the heart of the recession may be easing. The Commerce Department reported permits to build privately owned homes, an indicator of future activity, leapt to a seasonally adjusted annual rate of 518,000, an increase of 4.0 percent from April. The pace topped analysts' consensus forecast of a rate of 508,000 permits. Building permits had fallen in April to a revised rate of 498,000, the lowest level since the data began to be tracked in 1960. On an annual basis, building permits in May were 47.0 percent below the May 2008 level. Construction starts on new homes also rebounded in May, vaulting 17.2 percent from the prior month to a seasonally adjusted annual rate of 532,000. The department revised the April figure to 454,000 starts, a low point unseen since publication of the data began in 1959. The increase in May construction starts was sharply higher than the 485,000 expected by analysts. But it was 45.2 percent lower than a year ago. Analysts said the data signals recovery may be taking shape in the ailing housing market, where foreclosures are spiking, home prices continue to fall and a glut of unsold homes remains on the market. “Overall, this was a good report,” said Patrick Newport of IHS Global Insight. “Based on May's numbers, we should continue to see improving housing starts numbers nationally and across all four regions over the next two months,” Newport said. Ian Shepherdson, chief US economist at High Frequency Economics, agreed.
