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New property starts in US plunge to new low

Figures from the United States Census Bureau show that the number of privately owned housing starts, homes where construction has started, was 458,000 units in April, 54.2% lower than the same time last year.

The number of housing starts reached a low of 488,000 in January then rose above 500,000 in the following two months, an analysis of the figures shows.

However single family housing stats, which exclude apartments, rose 2.8% in April this year. This shows a slight rebound after several months of stagnation and despite the overall slump in residential property construction.

But analysts say that the figures show that a recovery in the US property market is still some way off. 'The data on housing starts indicates that the belief that the housing market
has stabilised is premature,' said Arek Ohanissian, economist at the Centre for Economics and Business Research.

'Unless the figure for April is significantly revised upwards it suggests that the housing market is still on its way down which is bad news for the economy as a whole,' Ohanissian added.

However a new survey indicates that real estate agents are optimistic. The research by home valuations and listings site HomeGain shows that only 29% of 1,150 Realtors said they expect home values in their market to decline in the next six months. About half, 49%, said they expect home values will stay the same and 22% were expecting values to increase.