Housing, Jobless Data Point To A Fragile Recovery - Money News ...

WASHINGTON -- Adding to evidence the recession has ended, housing construction rose in August and fewer laid-off workers sought jobless aid last week.

Still, the reports suggested a slow and fragile economic recovery. The rise in housing starts was due solely to a jump in the volatile apartment-building category, and unemployment claims remain far above levels associated with a healthy economy.

And even as the housing industry begins to recover from its worst downturn in decades, a glut of unsold homes and record levels of home foreclosures are weighing on the industry.

Construction of single-family homes and apartments rose 1.5 percent to an annual rate of 598,000 units, the highest level since November, the Commerce Department said Thursday. That was slightly lower than the 600,000-unit pace economists had expected. And it remains more than 70 percent below the peak rate hit in 2006.

The tentative improvements in housing are most likely a rebound "from unsustainably weak results ... reinforced by a temporary boost to demand" from the $8,000 first-time homebuyer tax credit that ends Nov. 30, Joshua Shapiro, chief economist at MFR Inc., wrote in a note to clients.

"Gains from here on will probably be much more difficult to achieve," due to high unemployment, tight credit and the large number of homes already on the market, he said.

Applications for building permits, a gauge of future activity, rose 2.7 percent in August to an annual rate of 579,000 units, slightly below the 580,000 level that had been forecast. But for single-family homes, permits dipped 0.2 percent. They rose 15.8 percent for multifamily units.

The 1.5 percent rise in overall housing starts followed a small 0.2 percent dip in July. The August strength reflected a 25.3 percent surge in construction of multifamily units, a volatile sector that had fallen 15.2 percent in July.

Single-family home construction dipped 3 percent last month to an annual...

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