The Commerce Department said housing starts dropped 3.7 percent to a seasonally adjusted annual rate of 1.287 million units in April. The decline reversed March’s rise, indicating that housing continued to tread water.
Lucia Mutikani of Reuters had the news:
Building permits fell 1.8 percent to a rate of 1.352 million units last month. Starts fell in the Northeast, West and Midwest, but rose in the South.
Single-family homebuilding, which accounts for the largest share of the housing market, edged up 0.1 percent to a rate of 894,000 units last month. Single-family homebuilding has lost momentum since setting a 948,000-unit pace last November, which was the strongest in more than 10 years.
Last month’s gain in single-family starts was outpaced by an 11.3 percent decline in groundbreaking activity on multi-family housing units. Residential construction has been hamstrung by rising prices for building materials and shortages of land and skilled workers.
While a survey on Tuesday showed confidence among single-family homebuilders perked up in May, builders complained that “the record-high cost of lumber is hurting builders’ bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market.”
Paul Wiseman of the Associated Press reported that there remains a housing shortage:
The pace of homebuilding is still below its long-run average of about 1.5 million a year, which has led to a shortage of homes on the market. Millennials are increasingly moving out on their own to buy their own homes.
Demand for housing is strong despite an uptick in mortgage rates: The rate on the benchmark 30-year, fixed-rate home loan is 4.55 percent, up from 4.05 percent a year ago.
In April, housing starts fell 16.3 percent in the Midwest, 12 percent in the West and 8.1 percent in the Northeast. They rose 6.4 percent in the South.
Building permits, an indicator of future construction, fell 1.8 percent in April to a seasonally adjusted 1.35 million.
Jeffry Bartash of MarketWatch.com reported that the rate is still near an 11-year high:
The annual rate of new homes being built declined to 1.29 million last month from a revised 1.34 million pace in March that was the strongest since mid-2007. That’s how many homes builders would erect if they maintained April’s pace through the whole year.
Economists polled by MarketWatch has expected starts to total 1.29 million.
Permits for new construction slipped a smaller 1.8% to a 1.35 million annual clip, the government said Wednesday.
What happened: Most of the decline in home construction occurred in the volatile multi-dwelling category — condos, townhouses, apartment buildings and the like.
Single-family starts were barely changed. These homes make up the bulk of the U.S. market for new dwellings.
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Starts fell in all regions except the South, where roughly half of all new homes are built each year.
