Economists are seeing light at the end of the tunnel for the new housing industry. Builders are finding pockets of opportunity in communities and new construction has been picking up.

That is great news for the construction industry that got massively overbuilt and created a glut of inventory as speculators and unqualified homeowners flooded the marketplace. The pull back, while extreme, allowed the inventory to be absorbed. A necessary step in stabilizing the marketplace.

Now lets hope that interest rates remain low so housing can continue to stabilize and start growing.

“We believe housing starts are close to a bottom, provided home sales do not fall back under the weight of higher mortgage rates,” wrote Michelle Meyer, economist for Barclays Capital.

The decline in April starts was entirely due to reduced building in the multifamily segment of condos and apartments. Starts of single-family homes have been roughly stable for the past four months at around 360,000 annualized after plunging precipitously late last year. Starts of single-family homes “appear poised to head higher,” wrote Peter D’Antonio, an economist for Citigroup Global Markets.

It may appear unwise for builders to start construction on any new homes when so many are vacant. But housing operates based on local factors, and vacant homes across the county, state or nation are almost irrelevant for a builder who sees an opportunity in a particular market. MarketWatch.

Related posts:

1. 37,100 Housing Starts In December 2008 – Down Significantly
2. Housing Starts Down 54.2 Percent For April, 2009
3. Construction Jobs Down 13 Percent From Last Year
4. Wall Street Feeling Positive About Home Builders
5. Home Construction Drops 16.6 Percent In January, 2009