05/23/2019
Starts on construction of private housing rose a healthy 5.7 percent in April to hit an annual rate of 1.235 million, the Census Bureau and the Department of Housing and Urban Development jointly reported last week. This was well above economists' forecasts for a smaller rise to a rate of 1.209 million. Compared to the same period last year, April's housing starts were 2.5 percent below April 2018's pace of 1.267 million.
Starts on single-family homes rose 6.2 percent to hit at an annual rate of 854,000, while starts on buildings with five units or more rose 2.3 percent to hit a rate of 359,000. Compared to last year, single-family starts were down 4.3 percent from April 2018's pace of 892,000 and starts on multi-family units were up 1.4 percent from a rate of 354,000 last year.
Meanwhile, building permits issued for construction of new housing - an indicator of future growth - ticked up 0.6 percent to an annual rate of 1.296 million. Permits issued for single-family home construction in April fell 4.2 percent to an annual rate of 782,000, while permits for multi-family units jumped 7.1 percent to a pace of 467,000.
"Single-family starts drove the bulk of the strength, in line with the rebound seen in new home sales lately," CIBC Capital Markets Economist Katherine Judge told MarketWatch. "That segment adds more value to GDP on a per-unit basis, a positive for residential investment. However, the slight acceleration in the pace of building permits to 1.296 million was driven entirely by the multi-family segment, suggesting that the strength in the building of singles could be fleeting. Still, today's report confirms that the U.S. housing market is on healthier footing, having moved off of the lows seen in recent months."
