Construction Comes Up Strong

The housing market continues puttering along - in various news reports on Wednesday, we learned that pending home sales were up 6 percent in April, which is good, but mortgage applications have fallen to their lowest level since April 1997. It seems that for every good sign, there's a concurrent bad one.

But there was a very good report from the construction sector: April brought the biggest rise in construction spending in almost ten years. The construction industry was up 2.7 percent in total spending for the month. Nonresidential construction was up 1.7 percent, which doesn't sound like much but was the first monthly gain in that area in over a year.

The biggest reason we look for a rebound in the housing market is to get the construction industry moving again. Selling existing homes is great, but it's the creation of new homes that really fosters economic activity. The fact that construction is moving ahead even in an environment where the overall housing market is still very mixed - that's pretty good news.