US housing starts rose sharply in April, while building permits continued to advance in the latest sign the housing market was regaining its footing after a harsh winter season.
Housing starts surged 20.2 percent to a seasonally adjusted annual rate of 1.135 million, following an upwardly revised gain of 944,000, the Commerce Department reported on Thursday. A median estimate of economists called for an increase to 1.019 million.
Compared to April 2014, housing starts were up 9.2 percent.
Single-family housing starts, which represent the largest segment of the market, surged 16.7 percent to a seasonally adjusted 733,000.
Building permits, a bellweather for future construction, rose 10.1 percent to a seasonally adjusted annual rate of 1.143 million. Building permits were expected to rise to a seasonally adjusted 1.06 million.
Compared to year-ago levels, building permits were up 6.4 percent.
Analysts expect a broad pickup in housing activity in the second quarter, despite growing affordability concerns. Existing home sales rebounded sharply in April, reaching the highest level in 18 months, the National Association of Realtors reported last month. The NAR expects existing home sales to finish the year at their strongest pace since 2006.
The NAR will post May existing home sales figures on Thursday.
On Monday the National Association of Home Builders (NAHB) said builder confidence edged lower in May, but that the overall market was expected to improve amid higher future sales expectations and favourable mortgage rates. The NAHB housing market index dropped two points to 54, remaining above the 50-level that separates optimism from pessimism.