Home building slides 3.7 percent in April

Marco Green
May 17, 2018

Construction in the all-important single-family segment held steady, rising only 0.1 percent to a rate of 894,000 units.

The monthly decline was entirely driven by a drop in multifamily construction.

Regionally, combined single- and multifamily housing production increased 6.4% in the South, however, starts fell 8.1% in the Northeast, 12% in the West and 16.3% in the Midwest. Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,287,000, a 3.7 percent drop from the revised March estimate of 1,336,000 but a 10.5 percent spike from the April 2017 rate of 1,165,000.

The April reading of 1.29 million units is the number of housing units builders would begin if they kept this pace for the next 12 months.

Figures released this morning showed USA home building tumbled in April and permits fell, suggesting the housing market continued to tread water amid shortages of land and skilled labour. The report included revisions to housing starts dating back to 2013 and building permits to 2012.

"Housing starts are an important source of future supply and, as we have previously discussed in our Real House Price Index, the housing market is facing a supply constraint problem", Fleming adds. The pace of homebuilding is still below its long-run average of about 1.5 million a year, which has led to a shortage of homes on the market. Construction companies cite a shortage of workers, rising costs for lumber and other building materials and a scarcity of available lots on which to start new projects.

The Trump administration in April a year ago imposed anti-subsidy duties on imports of Canadian softwood lumber.

New-home construction declined in April as fewer starts of apartment projects outweighed a modest improvement in single-family structures, government figures showed Wednesday.

But multi-unit dwellings plunged 12.6 percent to 374,000 units, offsetting nearly all of the March increase.

Robert Dietz, chief economist for NAHB, points out that single-family starts "are up 8.3 percent for the first four months of the year relative to the start of 2017, which is higher than our forecast and bodes well for the rest of the year".

Other reports by Click Lancashire

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