Housing starts decline 30% in April
Single-family starts are pacing ahead of 2019.
Housing starts declined in April as the COVID-19 crisis continues to impact residential construction.
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 891,000, falling 30.2% below a revised March estimate of 1.276 million, the Department of Commerce reported today.
The latest Monthly New Residential Construction report is also nearly 30% below below the April 2019 rate of 1.267 million.
Single-family housing starts in April were at a rate of 650,000, which is a 25.4% decline from the revised March figure of 871,000. The April rate for units in buildings with five units or more was 234,000.
But single-family starts are actually up 1.3% on a year-to-date basis, compared to 2019.
The multifamily sector, including apartments and condos, is down 40.5% to a 241,000 pace. The National Association of Home Builders has forecast a larger decline in multifamily construction, compared to single-family construction, during the recession caused by the COVID-19 pandemic.
April housing permits fell 20.8% to an adjusted annual rate of 1.074 million from the revised March rate of 1.356,000 million. This is also a 19.2% decrease compared to the April 2019 rate of 1.33 million.
Single-family permits are down 24.3% to 669,000 in April as compared to the revised March figure of 884,000. Authorizations of units in buildings with five units or more were at a rate of 373,000 in April.
“Despite today’s numbers, there is an undercurrent of long-term positivity in the housing market that will likely allow for a strong rebound,” said NAHB Chairman Dean Mon. “Our builder confidence index has already shown signs of a turnaround. Housing was showing signs of momentum before the pandemic and is poised to lead the economic recovery as virus mitigation efforts take hold and more states take gradual steps to reopen.”
The latest NAHB/Wells Fargo Housing Market Index (HMI) increased 7 points to 37 for May. The index measures builder confidence for newly-single family homes.
NAHB Chief Economist Robert Dietz said that he expects to see further improvement as the U.S. economy begins shedding regional restrictions.
“While the April numbers were down, they were somewhat better than forecast and are expected to improve as more of the economy reopens,” Dietz said. “Single-family weakness was particularly seen in the West and Northeast as larger metro areas were under more economic pressure due to the lockdown phase. But as a sign of the strength housing had going into this downturn, single-family starts are still 1% higher on a year-to-date basis.”
Housing Starts by Region:
- Northeast: Total starts plummeted 43.6% as single-family starts plunged 66%.
- Midwest: Total starts fell 14.9% as single-family starts declined 13.3%.
- South: Total starts dropped 26% as single-family starts are down 15%.
- West: Total starts decreased 43.4% as single-family starts descended by 37.3%.
Permits by Region:
- Northeast: Total residential permits and single-family permits both declined 45.5%.
- Midwest: Total permits are down 16.1% as single-family permits are decreased 16.2%.
- South: Total permits declined 14.7% as single-family permits dropped 20.3%.
- West: Total permits have fallen 28% as single-family permits are down 33.2%.
The complete Monthly New Residential Construction Report for April 2020 is available here.
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