Housing Construction Jumps in May

Construction of new homes jumped in May by the largest amount in three months, an encouraging sign that the nation's deep housing recession was beginning to bottom out. The Commerce Department said today that construction of new homes and apartments jumped 17.2 percent last month to a seasonally adjusted annual rate of 532,000 units. That was better than the 500,000-unit pace that economists had expected and came after construction fell in April to a record low of 454,000 units. Although construction rose nationwide, led by a 28.6 percent surge in the West, the Northeast had the smallest gain of 2 percent. Construction rose 6.8 percent in the South and 11.1 percent in the Midwest. In another encouraging sign, applications for building permits, seen as a good indicator of future activity, rose 4 percent in May to an annual rate of 518,000 units. The better-than-expected rebound in construction was the latest sign that the prolonged slump in housing is coming to an end, which would be good news for the broader economy. Ap.