Wednesday, June 21, 2006

US home construction rebounded in May

U.S. home construction rebounded in May from a 13-month low as builders worked on backlogged orders and used incentives such as free car leases to win new business.

Housing starts rose a greater-than-expected 5.0 % to an annual rate of 1.957 million, the Commerce Department said yesterday. Building permits, a sign of future construction, fell 2.1 % to an annual pace of 1.932 million, the lowest since November 2003.

While the increase in starts doesn't change the outlook for a cooling housing market, the number may reassure investors and Federal Reserve policymakers that the slowdown won't become a rout.


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