Housing starts slide in April
Housing starts in April dropped 9.5% to a seasonally adjusted annual rate of 1.569 million from the revised March estimate of 1.733 million.
But the latest figure is 67.3% above the April 2020 rate of 938,000, according to the latest Monthly New Residential Construction report from the Census Bureau and the Department of Housing and Urban Development.
Single-family starts in April declined 13.4% to a rate of 1.087 million from the revised March rate of 1.255 million.
Privately‐owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1.76 million, edging up 0.3% from the revised March rate of 1.755 million.
The April 2021 rate is also 60.9% above the April 2020 rate of 1.149 million. Single‐family permits in April fell 3.8% to 1.149 million compared to the revised March rate of 1.194 million.
Reacting to the latest housing number, National Association of Realtors Chief Economist Lawrence Yun called the results "discouraging, at first glance."
"America is facing an epic housing shortage and more homes need to be built. The monthly data can be volatile, but the overall underlying trend is still on the upside," Yun noted.
The economist points out that year-to-date figures in 2021 for housing starts were 1.59 million units (annualized pace) compared to 1.38 million in 2020, a 15% gain. And while single-family housing starts declined in the latest month but were up 26% on a year-to-date basis.
"More housing inventory will reach the market in a few months, certainly by autumn, because of the upward trend in home construction, Yun said.
Housing starts are projected to reach 1.6 million for all of 2021 and rise further to 1.7 million in 2022. This would mark the highest home construction activity in 15 years.
"It is not an overproduction, but rather an attempt to compensate for multiple years of underproduction that led to the current housing shortage," Yun said.
While home builder sentiment held steady in May, according to the National Association of Home Builders (NAHB), the industry continues to face high lumber prices, supply shortages, and a lack of available lots.
Here’s how April residential starts and permits performed on a regional basis:
- In the Northeast, total home starts increased 6.2% while single-family sales fell 13%. Overall permits increased 8.4% as single-family permits were down 2.6%.
- In the Midwest, total sales starts dropped 34.8% as single-family starts declined 32.3%. Total permits dropped 9.9% with single-family permits down 9.2%.
- In the South, total starts declined 11.5% as single-family starts decreased 12.5%. Combined permits increased 3.9% but single-family permits fell 1.4%.
- In the West, total starts increased 9% as single-family starts saw no change compared to the prior month. Permits declined 4.1% as single-family permits decreased 6.4%.
The full Monthly New Residental Construction report for April 2021 is available here.
