Construction of new homes plummeted in April, dragged down by a major drop in apartment building. Builders broke ground on 10.6% fewer new homes last month. The seasonally adjusted rate fell to 523,000 homes per year, the Commerce Department says. That’s less than half the 1.2 million homes per year that economists consider indicative of a healthy market.
The weak construction data show how builders are struggling to compete with millions of foreclosures, which are forcing down prices for previously occupied homes. The median price of a new home was about 34% higher in March than the median price for a re-sale. That’s more than twice the markup in healthy housing markets.
