Housing starts surge to 8-year high in April

The home building market perked up in April along with the milder weather as housing starts surged to an eight-year high.

Builders broke ground last month on 1.14 million homes at a seasonally adjusted annual rate, up 20.2% from March, the Commerce Department said Tuesday. That's the most since November 2007. Economists surveyed by Bloomberg predicted a rise to 1.02 million. March's total housing starts were revised to 944,000 from 926,000.

A harsh winter crimped housing construction earlier this year, especially in the Northeast and Midwest. In April, the pace of building jumped 86% in the Northeast, 28% in the Midwest and 39% in the West. It dipped 1.8% in the South.

Applications for permits, which indicate future housing starts, increased 10.1% to 1.14 million.

Economists expect the market to gain momentum throughout the year, if gradually, with starts edging up slightly from last year's total of just over 1 million. That was the best showing since the recession but well below the historical average of 1.5 million.

Mortgage rates remain low and job growth has been strong. But credit is still tight, especially for first-time homebuyers.

On Monday, the National Association of Home Builders reported that an index of builders' optimism slipped but remained in positive territory.