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Home prices are rising in most markets. And mortgage rates have tumbled to the lowest levels on record, which has encouraged more buying. One reason prices are rising is the supply of homes for sale remains extremely low. There were 145,000 new homes for sale in May. That's just 1,000 higher than in April, when the supply was the lowest on records dating back to 1963. With the supply is thin and sales rising, builders can charge more. It also means there's room for more competition. Economists say that may explain why builders are laying plans for more homes and apartments over the next 12 months. Still, the market is long way from returning to full health. A sluggish job market could deter some would-be buyers from making a purchase this year. The U.S. economy created only 69,000 jobs in May, the fewest in a year. The unemployment rate rose to 8.2 percent last month from 8.1 percent in April. While spending on homebuilding has risen, spending on government building projects has fallen. Governments at all levels have been struggling to deal with huge budget gaps caused by the recession. The economy grew at a tepid annual rate of 1.9 percent in the January-March quarter. Residential construction added to growth. But many economists expect growth slowed in the April-June quarter.
[Associated
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