April Housing Starts Post Modest Year-Over-Year Gain

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The U.S. Census Bureau and the Department of Housing and Urban Development reported Wednesday morning that new housing starts in April rose to a seasonally adjusted annual rate of 1.287 million, a decrease of 3.7% from the upwardly revised March rate of 1.336 million and an increase of 10.5% compared with the April 2017 rate of 1.165 million.

The revision to the March rate added 17,000 new housing starts to the previously reported total. The consensus estimate from a survey of economists expected a rate of around 1.325 million in April.

Single-family housing starts rose month over month by 1,000 in April to 894,000. The increase reflects a month-over-month decline in all regions except the South, where starts rose by 17.2%.

Danielle Hale, chief economist for Realtor.com, commented on today’s report:

We saw 894,000 single-family housing starts in April, a slight step up from an upwardly revised March figure. We remain significantly behind a normal level of 1.2 million starts. In fact, if single-family starts continue at the strong yearly growth rate we saw in April, it will be fall 2019 before annual single-family starts break the 1 million mark consistently — which is still 17 percent lower than normal.

The seasonally adjusted rate of new building permits slipped to 1.352 million, down 1.8% from the upwardly revised February rate of 1.377 million but 7.7% higher than the April 2017 rate.

Permits for new single-family homes rose month over month in April from a revised annual rate of 851,000 in March to a seasonally adjusted annual rate of 859,000. The rate rose 7.9% year over year.

Multifamily starts for buildings with five or more units increased by 7.2% year over year in April and fell by 12.6% compared with March. This number is more volatile than the single-family number and has moved mostly sideways since 2013.

In 2017, 1.202 million housing units were started, up 2.4% compared with 2016, and a 10-year high. An estimated 1.263 million permits were issued in 2017, up 4.7% year over year.