Broad Declines for Home Construction in April
Reflecting the continued impact of the COVID-19 pandemic, total housing starts decreased 30.2% in April to a seasonally adjusted annual rate of 891,000 units, according to a report from the U.S. Housing and Urban Development and Commerce Department. The April reading of 891,000 starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts decreased 25.4% to a 650,000 seasonally adjusted annual rate. This is the lowest single-family starts rate since the first quarter of 2015. The multifamily sector, which includes apartment buildings and condos, decreased 40.5% to a 241,000 pace. "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." "While the April numbers were down, they were somewhat better than forecast and are expected to improve as more of the economy reopens," said NAHB Chief Economist Robert Dietz. "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." On a regional and year-to-date basis (January through April of 2020 compared to that same timeframe a year ago), combined single-family and multifamily starts are 6.8% higher in the Midwest, 9% higher in the South, 7.7% higher in the West and 1.3% lower in the Northeast. Overall permits declined 20.8% to a 1.07 million unit annualized rate in April. Single-family permits decreased 24.3% to a 669,000 unit rate, while multifamily permits decreased 14.2% to a 405,000 pace. Looking at regional permit data on a year-to-date basis, permits are 7.1% higher in the South and 4.1% higher in the West. Meanwhile, permits are 8% lower in the Northeast and 3.1% lower in the Midwest.