U.S. single-family housing starts tumble April

U.S. single-family homebuilding fell in April, according to new Commerce Department data released on Thursday, adding to signs that higher borrowing costs and excess new-home supply are weighing on construction. The Census Bureau said single-family housing starts dropped 9.0% from March to a seasonally adjusted annual rate of 930,000. Single-family permits, a proxy for future construction, also fell. Total housing starts declined less sharply because multifamily activity rose. ### What exactly fell in April? The Census Bureau said single-family housing starts fell to a 930,000 annualized pace in April from a revised 1.022 million in March. That is the cleanest measure of how many new detached houses builders began during the month, adjusted for seasonal patterns. Single-family building permits fell to an annual rate of 872,000 in April from a revised 895,000 in March. Permits matter because they usually lead starts, so a decline there suggests builders were also less willing to line up future projects. ### Why did the headline total look less weak? Total housing starts fell 2.8% in April to a 1.465 million annual rate, much smaller than the single-family drop. (census.gov) The gap came from apartment and other multifamily construction, where starts for buildings with five units or more rose to a 529,000 pace. Total permits actually rose 5.8% to a 1.442 million annual rate in April. (census.gov) That increase was driven by multifamily permits, which climbed to 514,000, offsetting the decline in single-family authorizations. ### Was the weakness broad or concentrated in one region? Reuters reported that single-family homebuilding fell in all four U.S. regions in April. That matters because it points to a nationwide slowdown in detached-home construction rather than a pullback limited to one market. (census.gov) TD Economics said only the South posted a decline in overall permitting activity among the four Census regions, down 11.0%. (census.gov) That regional split helps explain why total permits rose even as single-family permits fell: multifamily projects and regional differences masked the pullback in detached homes. ### What are builders and economists pointing to? (money.usnews.com) Reuters said the April data suggested the housing market could remain subdued as mortgage rates rose and a surplus of new houses persisted. Bloomberg also said the drop in single-family starts pointed to builder caution amid higher mortgage rates. Those assessments were attributed to the two news organizations’ reporting on the government figures. (economics.td.com) Realtor.com said builders were grappling with rising rates, while the official Census release showed starts data remain volatile enough to carry wide confidence intervals. The government report listed the single-family starts change as 9.0% lower month over month, with a margin of error attached to the estimate. ### How should readers read the permits contradiction? (money.usnews.com) April’s data show two different housing stories at once. The official federal release said total permits rose, but that gain came from multifamily projects; the same release also showed single-family permits fell 2.6%. So reports describing a rebound in overall permits are not inconsistent with reports showing a decline in permits for future single-family construction. (realtor.com) The next benchmark for this trend will come from later Census housing reports and other housing-market indicators, including mortgage-rate updates and new-home sales data. The April new residential construction release was issued at 8:30 a.m. EDT on May 21 under release number CB26-84. (census.gov 1) (census.gov 2)