WRAPUP 1-US housing starts, building permits fall sharply

  • WRAPUP 1-US housing starts, building permits fall sharply

WRAPUP 1-US housing starts, building permits fall sharply

Data from the HUD and the Commerce Department show a 3.7% drop month-over-month to 1,287,000 units (seasonally adjusted annual rate) which is 10.5% higher than a year earlier.

"The details are better than the headlines because all the decline in both starts and permits is in the volatile multi-family sector, where activity was very elevated in March and has now corrected", said Ian Shepherdson of Pantheon Macroeconomics. Permits for single-family homes rose 0.9 percent in April, but are below their recent highs seen in the winter months.

Building permits issued for single-family homes - one of the most closely watched figures in the monthly report, as it signals construction in the pipeline - fell 1.8 percent, matching analyst expectations.

Homebuilding jumped 17.2 percent in the South, the lone region to see an increase - but plunged almost 30 percent in the Midwest, where single-family construction fell faster than apartments.

Figures released this morning showed US home building tumbled in April and permits fell, suggesting the housing market continued to tread water amid shortages of land and skilled labour.

"We expect housing starts to continue to gain ground through 2018, supported by positive fundamentals such as low unemployment and healthy wage increases, which are expected to offset higher mortgage rates".

Randy Noel, chairman of the National Association of Home Builders (NAHB), says his organization had anticipated "some pullback" for housing starts in April "after such a strong March report". Residential construction has been hamstrung by rising prices for building materials and shortages of land and skilled workers. These constraints have left builders unable to plug an acute shortage of houses on the market, restraining home sales growth.

"On an April year-to-date basis, the supply-starved West region was by far the most vibrant, growing construction region, with a 28 percent increase in construction", Khater said. Multifamily slowed 12.6% since March but rose 19.1% since April 2017. Single-family permits ticked up 0.9 percent to 859,000 while multifamily permits fell 6.3 percent to 493,000 after a 20.4 percent jump in March.

The number of single-family units completed fell 4.0 percent in April.