US housing market stabilizing as single-family homebuilding, permits surge

U.S. single-family homebuilding increased for a second straight month in March, while permits for future construction surged, offering some glimmers of hope for the depressed housing market ahead of the busy spring selling season.

The improvement in the single-family housing market segment, which was reported by the Commerce Department on Tuesday, likely reflected buyers taking advantage of a retreat in mortgage rates. A survey on Monday showed falling mortgage rates and tight supply of previously owned houses were supporting the new home market.

"Mortgage rates have pulled back from the peaks in October/November, helping to provide a jolt to demand and sales activity," said Ben Ayers, a senior economist at Nationwide in Columbus, Ohio. "But the environment remains challenging with high input and labor costs for builders and expensive financing options for buyers."