April Housing Starts May Have Eased

Housing starts are forecast at a 1.98-million annual rate for April, compared with 2.01 million in March and a January pace of 2.06 million that was the fastest in 16 years, according to the median estimate in a Bloomberg survey ahead of Tuesday’s report from the Commerce Department.

A measure of applications to purchase homes rose to 494.3 two weeks ago, close to the record 501.6 recorded in January, according to figures from the Mortgage Bankers Assn. That will add to growing backlogs of homes awaiting construction.

Increased borrowing costs may spur some people to buy houses in anticipation that rates will keep rising, said economists such as Greg McBride at Bankrate Inc., the North Palm Beach, Fla., company that operates a financial services website.

The average 30-year fixed mortgage rate rose last week to 6.34%, the highest in eight months, according to mortgage company Freddie Mac.

Mortgage rates are tied to Treasury yields, which have been rising because investors are betting that stronger economic growth will lead to accelerating inflation, which erodes the value of fixed-income investments.