New home construction rose last month but by less than expected, according to government data released Thursday, as the housing market continues to attempt a tentative recovery.
Housing starts climbed 0.5 percent to a seasonally adjusted 590,000 annual rate compared with the prior month, according to the Commerce Department. Analysts had expected construction to reach an annual rate of about 615,000. Housing starts were down 28 percent from the same period last year.
A 3.9 percent increase in construction in single-family homes was offset by declines in the multifamily market, which includes apartment buildings. Construction starts in that market, which is often volatile, fell 15.2 percent. Construction levels fell throughout the country, except the South, which includes the Washington region, where housing starts rose 7.1 percent.
There was also a decline in applications for building permits, considered a sign of future construction activity, which fell 1.2 percent in September. That could reflect that the uptick in home sales spurred by the first-time home buyer tax credit has already begun to wane, analysts said, The $8,000 tax credit expires at the end of next month, and housing industry economists have argued for its extension and expansion.
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