Housing starts slip in April
Housing starts were nearly flat in April, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reported this morning.
Total housing starts fell 0.2% in April to a seasonally adjusted annual rate of 1.724 million compared to the revised March estimate of 1.728 million.
The latest report is 14.6% above the April 2021 rate of 1.505 million, however.
Single-family starts dropped 7.3% to a rate of 1.100 million compared to the March revised rate of 1.187 million.
The April rate for units in buildings with five units or more was 612,000, rising 16.8% above the previous month and a rate of 524,000
Total permits in April were at a seasonally adjusted annual rate of 1.819 million and 3.2% below the revised March rate of 1.879,000.
The April rate for total permits is 3.1% above the April 2021 rate of 1.765 million.
Single-family permits for April decreased 4.6% from the revised March figure of 1.163 million.
Authorizations of units in buildings with five units or more were at a rate of 656,000 in April. This is an 0.6% decrease compared to the prior month but and 16.3% increase from April 2021.
Yun notes that the homes-for-sale inventory in March was still essentially at an all-time low with less than a million homes on the market.
"Builders are responding to higher mortgage rates and are chasing rising rents, with fewer homebuyers and more renters being forced to renew their leases," Yun explains. "Even before the rise in interest rates, apartment vacancy rates were at historic lows and rents were accelerating. Some degree of a return to the office is also fueling back-to-city living where high rises are concentrated."
The latest residential construction report arrives as home builders ask for more assistance in regard to improving housing affordability.
Earlier this week, The White House released its "Housing Supply Action Plan," which is designed to ease high housing costs by increasing the supply of quality housing throughout the nation over the next five years.
Also, the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Index fell eight points to 69 this month. The index measures builder confidence in the market for newly-built single-family homes.
Rising mortgage rates in March and April combined with ongoing building material supply chain disruptions, labor shortages, and high inflation continues to inflate housing costs.
According to the NAHB, less than 50% of homes sold in the first quarter were affordable to median-income families.
Here’s how starts and permits performed by region on a month-over-month basis:
- Total housing starts in the Northeast dropped 23.2% as single-family starts fell 4.8%. Combined permits declined 11.9% while single-family permits were down 6.1%.
- In the Midwest, total starts declined 22% as single-family starts decreased 13.6%. Total Permits slipped by 3.5% while single-family permits were down 7%.
- Starts in the South increased 10.6% as single-family starts fell 10.6%. Total permits increased 1.0% as single-family permits dipped by 1.2%.
- In the West, total starts increased 3.3% as single-family starts rose by 1.4%. Combined permits stepped back by 8.4% as single-family permits receded 11.3%.
