Housing Production Drops 2.6 Percent in April, as Multifamily Starts Fall

Led by a decline in multifamily production, nationwide housing starts fell 2.6 percent in April to a seasonally adjusted annual rate of 1.17 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. Multifamily starts fell 9.2 percent to a seasonally adjusted annual rate of 337,000 units while single-family production remained essentially unchanged, ticking up 0.4 percent to 835,000. In the South, single and multi-family starts fell 3.4 percent and permits fell 7.4 percent.

“Despite this minor pull back, builders are optimistic about market conditions and expect more consumer activity in the months ahead,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. “However, builders need to be careful to manage expenses as construction costs continue to rise.”

“While we saw a little pause in market growth this month, single-family production is still up 7 percent since the start of 2017,” said NAHB Chief Economist Robert Dietz. “The April report falls in line with our forecast for continued, gradual strengthening of the single-family sector throughout the year.”

Regionally in April, combined single- and multifamily housing production rose 19.4 percent in the Midwest and 9.1 percent in the West. Starts fell by 3.4 percent in the South and 29.2 percent in the Northeast.

Overall permit issuance in April was down 2.5 percent to a seasonally adjusted annual rate of 1.23 million units. Multifamily permits inched up 1.4 percent to 440,000 units while single-family permits fell 6.2 percent to 789,000.

Regionally, overall permits rose 8.7 percent in the West and 1.0 percent in the Midwest. Permits fell 7.4 percent in the South and 10.3 percent in the Northeast.

Source: National Association of Home Builders