Single-family home construction in California showed an increase in April when compared to March and was the largest monthly total since October 2008, which the California Building Industry Association said provided more evidence that the homebuyer tax credit enacted in the beginning of March is helping to clear out inventory and generate new-home construction.

According to statistics from the Construction Industry Research Board, 2,265 single-family permits were pulled in California during the month of April, down 33 percent when compared to the same month a year ago but up 21 percent when compared to March. It was the largest monthly total since October when 2,352 permits were pulled.

CBIA’s President and CEO Robert Rivinius said the month-to-month increase in single-family production indicates that builders are clearing out inventory due to the tax credit and are starting to build again, but that the tax credit funds need to be replenished in order to continue the positive momentum.

“The tax credit enacted in March is having the desired effect of stimulating home sales and clearing out inventory, which is helping to generate new construction and put people back to work in the process,” Rivinius said. “Our elected officials gave our industry a much-needed shot in the arm for which we are very grateful.

“However, almost two-thirds of the allocated funds for the credit have been applied for since the program was enacted just 12 weeks ago, which is why we are pushing for a second round of the tax credit by adding another $200 million to the fund in hopes of keeping the positive momentum going while generating construction and much-needed tax revenues for the state and local government,” he continued.

Rivinius cited the most recent report from the Franchise Tax Board that says applications for the tax credit total $65.7 million as of May 20.

In April, a total of 3,127 permits were pulled throughout the state, down 52 percent when compared to April 2008, but down just 12 percent when compared to March. Multifamily permits totaled 862, down 72 percent from the same month a year ago, and down 48 percent from March.

Ben Bartolotto, research director for the Construction Industry Research Board, attributed the overall month-to-month decline to the multifamily sector, which saw an unexpected large increase in March.

CIRB is forecasting permits will be pulled for just 40,000 total units in 2009, which would be by far the lowest total on record, down 38 percent from the record-low 64,962 units produced in 2008. The forecast calls for 16,600 multifamily units, the lowest since 1993 when 14,755 permits were issued, and 23,400 single-family units, which would be the lowest on record.

“It’s clear that the tax credit is performing as expected, and if it is extended we believe housing starts will continue to strengthen in the months ahead. And that would be great news for state and local government revenues and for the economy as a whole,” Rivinius said. “Without the extension of the credit, we might not even be able to build what CIRB is forecasting.”