Home construction, a key source of freight transportation volume, rose slightly last month but remained weak amid high unemployment, tight credit and weak prices.
Construction of new homes and apartments rose 0.3 percent in September from a month earlier to a seasonally adjusted annual rate of 610,000, the Commerce Department said. August's figure was revised upward to an annual rate of 608,000 from an earlier estimate of 598,000.
Last month’s increase came from a 4.4 percent rise in construction of single-family homes, which represent 80 percent of the market. Construction of condominiums and apartments fell by nearly 10 percent.
Home construction news from JOC: Home Construction Rose 10.5 Percent in August
Homebuilding is important to transportation providers because it generates shipments of furniture and home furnishings as well as construction materials. PIERS Global Intelligence Solutions, a sister company of The Journal of Commerce, reports that containerized imports of furniture peaked in May, flattened in June and posted month-to-month declines in July and August.
The number of building permits issued to build new homes, a sign of future activity, fell 5.6 percent from August to a seasonally adjusted annual rate of 539,000. That drop was driven by a 20 percent decline in permits to build condominiums and apartments. Permits for single-family homes rose 0.5 percent.
Housing starts are up 28 percent from their bottom in April 2009 but are down 73 percent from their peak in January 2006.
Builders remain pessimistic about the housing market, which has been held back by a huge backlog of foreclosed properties. The National Association of Home Builders said Monday its monthly index of builders' sentiment rose in October to 16, the first increase in five months. A reading below 50 indicates negative sentiment about the market.
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