New apartments helped goose residential construction in the Twin Cities metro this month, according to the Builders Association of the Twin Cities. The group said that during the first four weeks of the year builders were issued 185 permits to build 465 units. That was slightly fewer permits, but twice as many units compared with the same period last year because of several new apartment buildings slated for construction this spring.

A single permit can be pulled to build more than one unit. This month, for example, five multi-family projects were permitted, including two 44-unit projects in St. Paul and Hudson, Wisconsin, and three projects in Minneapolis with 45, 60 and 75 units. Curt Christensen, BATC's president and owner of Lee Lyn Construction, said that he expects an uptick in home construction this year in line with a recent prediction from Metrostudy, a national housing research firm, which said that construction will increase 10 to 15 percent this year.

"Our members are gaining more confidence as the economy improves," he said. Home construction has been limping along at near-historic lows. In the Twin Cities metro last year construction activity was the second-lowest in recent memory with single-family homes representing only about half of all new units. With fewer people buying houses, apartment construction has been one of the few bright spots in the construction industry. Developers have plans to build several thousand units in the Twin Cities, especially in Minneapolis and St. Paul, where vacancy rates are falling to near-record lows. During January Minneapolis led the metro in building activity with 178 units and St. Paul was next with 46 units. Hudson, WI, was third with 45 units.

Construction activity of all kinds has been focused on the Twin Cities and the inner-ring suburbs that have easy access to transportation, jobs and retail. During the boom construction moved to the outer reaches of the metro area as prices pushed buyers to areas with cheaper land. That trend has been reversed. Last month, for example, nearly 40 houses were planned for Eagan and Maple Grove. Marv McDaris, president of the Minnesota division of Pulte Homes, said that his company is opening two new developments where he's seeing demand even before a "grand opening," or sales center can be built. That includes Fox Ridge in Arden Hills and Josephine Woods in Roseville. A recovery for the construction industry has been stifled in part because so many prospective new home buyers can't make a move until they've sold their existing home. Price-wise, builders are also facing stiff competition.

Foreclosures and short sales have put serious downward pressure on home prices, making it difficult for many builders to compete with existing homes. In the Twin Cities metro the foreclosure rate is lower than the national average and has fallen in recent months. CoreLogic said Monday morning that the foreclosure rate fell from 2.15 in November 2010 to 2.02 in November of last year. Nationally the foreclosure rate that month stood at 3.41 percent. Those foreclosure declines are due in part to a recent moratorium in foreclosure processing as lenders dealt with procedural problems. Those moratoriums have ended and lenders are playing catch-up, causing concern that more foreclosures could be on the way. The CoreLogic report said that during November 5.01 percent of mortgage loans were delinquent, down from 5.59 percent the previous year.