• U.S. housing starts in April rose 5.7% to 1.24 million units (annualized) from a notable upwardly revised 1.17 million units in March.
  • The increase was broad based, with both single and multi-family starts coming in higher. Single-family starts rose by 6.2% to 854k, while the more volatile multi-family segment posted a gain of 4.7% to 381k.
  • Permits advanced by 0.6% in April to 1.3 million after three consecutive months of declines. The gain was concentrated in the multi-family segment which was up 8.9%. Single family permits posted its fifth consecutive decline at -4.2%.
  • On a regional basis, the outturn was evenly split with significant gains posted in the Northeast (+84.6%), and Midwest (+42.0%), while declines were recorded for the West (-5.5%) and the South (-5.7%).

Key Implications

  • Housing starts in April continue to build on modest gains observed in March – reversing the decline that was previously reported for that month. Looking beneath the headline print, the increase was spread across both market segments and featured sizeable gains in two out of four regions.
  • Both starts and permits were the strongest they have been in three months, suggesting that despite headwinds faced by the industry, the prospects for greater output in the sector, which has been going through a soft patch of late, is looking better. In fact, homebuilder sentiment reached a seven month high in May.
  • On the demand side, moderating homes prices, falling mortgage rates and higher wages should continue to buoy demand as the busy Spring season picks up.

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