Slight boost in new homes construction
Construction of new homes posted the biggest increase in more than two years in April. Although it was a rare bit of good news for the housing market, analysts said it's far too soon to declare an end to the prolonged slump. The Commerce Department reported Friday that housing construction rose by 8.2 percent in April to a seasonally adjusted annual rate of 1.03 million units. Building of single-family homes continued to weaken, however; the growth came from a big jump in apartment construction. Analysts predicted the rebound in April would be temporary given the factors that builders still confront, from slumping sales to soaring home foreclosures.
Fannie Mae adjusts down payment rules
Fannie Mae is doing away with higher minimum down payment requirements for borrowers in parts of the country where home prices are dropping. The government-sponsored mortgage finance company said Friday that it will require minimum down payments of 3 percent to 5 percent for all loans it guarantees. That replaces a December policy that required a higher minimum if the loan was for a home in a ZIP code with declining real estate prices. Washington-based Fannie Mae said the move is part of its effort to help resuscitate the mortgage market. Fannie Mae and its smaller sibling, Freddie Mac, had been under intense pressure to relax lending policies that had been tightened in recent months as foreclosures and defaults skyrocketed.
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Building materials plants to close
Building Materials Holding Corp. said Friday that it will close its millwork and building materials distribution plants in Merced and Bakersfield. The facilities will close within two months, displacing 25 employees in Merced and about a dozen workers in Bakersfield. The San Francisco-based company and its subsidiary BMC West also operate a large distribution facility in Modesto's Beard Industrial District, which employs about 180 people, said Mark Kailer, vice president and treasurer. No changes are planned at that location, which will absorb much of the work from Merced, he said. President and Chief Operating Officer Stanley M. Wilson said in a statement that the company no longer could justify the cost of operating the plants because of a significant drop in the number of new housing permits.