* Starts up 13.2 percent, permits surge to near six-year
* Multi-family sector continues to lead activity
* Consumer sentiment ebbs in May
By Lucia Mutikani
WASHINGTON, May 16 U.S. housing starts jumped in
April and building permits hit their highest level in nearly six
years, offering hope the troubled housing market could be
A separate report on Friday showed consumer sentiment
falling in May on worries over income growth, tempering the
housing data's upbeat signal on the economy.
Groundbreaking for homes surged 13.2 percent to a seasonally
adjusted annual pace of 1.07 million units, the highest since
November 2013, the Commerce Department said. The increase, which
marked a rebound from a cold winter that had weighed on
activity, was driven by starts on multi-family housing.
A combination of rising mortgage rates and prices, and slow
growing earnings, has pushed homeownership out of the reach of
many Americans, helping fuel demand for rental and condo units.
"The current stock of apartments is insufficient to satisfy
demand, sending rents soaring across the country and making
multi-family units an attractive investment for developers and
landlords," said Stephanie Karol, an economist at IHS Global
Insight in Lexington, Massachusetts.
Groundbreaking for single-family homes, the largest part of
the market, rose 0.8 percent, while starts for the volatile
multi-family homes segment surged 39.6 percent.
U.S. Treasury debt yields rose on the data, while the dollar
was little changed against a basket of currencies. U.S. stocks
traded largely unchanged.
The housing market contracted for a second consecutive
quarter in the first three months of 2014, and is expected to
add little if anything to growth this year. Federal Reserve
Chair Janet Yellen said earlier this month that there was a risk
a protracted housing slowdown could undermine the economy.
A range of data has shown the economy bouncing back from a
deep winter chill. A quarterly survey released by the
Philadelphia Federal Reserve Bank on Friday showed forecasters
had bumped up their expectations for second-quarter growth to a
3.3 percent annual pace from 3.0 percent previously.
But questions remain over how lasting the current strength
will prove, and the report on consumer confidence offered a
cautionary note. The Thomson Reuters/University of Michigan's
consumer sentiment index fell to 81.8 from 84.1 in April.
BUILDING PERMITS OFFER MIXED SIGNALS
The housing starts report suggested building activity would
likely continue to rise for some time as permits to build homes
jumped 8.0 percent to a 1.08-million unit pace in April, the
highest since June 2008.
Permits for single-family homes, however, rose just 0.3
percent and continue to lag groundbreaking, suggesting
single-family starts could decline in the months ahead. A survey
on Thursday showed confidence among single-family home builders
slipped to a one-year low in May.
In contrast, permits for multi-family housing soared 19.5
percent. Multi-family permits are running well ahead of starts,
which could indicate delays in getting projects started. Permits
for buildings with five or more units were the highest since
(Reporting by Lucia Mutikani; Editing by Paul Simao)