U.S. new-home construction declined in April as fewer starts of apartment projects outweighed a modest improvement in single-family structures, government figures showed Wednesday.
Highlights of April Housing Starts:
- Residential starts fell 3.7 per cent to a 1.29 mln annualized rate (est. 1.31 mln) after revised 1.34 mln pace in prior month
- Multifamily home starts slumped 11.3% after a 13.6 per cent March increase; single-family rose 0.1 per cent
- Permits, a proxy for future construction of all types of homes, fell 1.8 per cent to 1.35 mln rate (matching est.)
- Report included revisions to housing starts dating back to 2013 and building permits to 2012.
Stable single-family starts underscore a pace of residential construction that will probably support economic growth as homebuilders remain upbeat about the market’s progress.
Builder optimism has its roots in solid sales that are being bolstered by resilient hiring and larger take-home pay following federal government tax cuts.
While demand and homebuilding remain solid, the industry is not without its challenges. 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. Affordability is also becoming a bigger issue as gains in property values outpace income growth and interest rates rise.
- Three of four regions posted declines in starts, led by a 16.3 per cent decrease in the Midwest and a 12 per cent drop in the West
- Construction climbed 6.4 per cent in the South, reflecting the fastest pace of single-family starts since July 2007
- Report released jointly by the Census Bureau and Department of Housing and Urban Development in Washington
--With assistance from Chris Middleton