After a decline in March, U.S. housing starts rose 1.6% in April to a seasonally adjusted annual rate of 1.361 million units, according to a Reuters report. However, the single-family segment continued to weaken, hitting a nine-month low, while multifamily construction showed strong growth.
Key Highlights:
- Total housing starts increased 1.6% to 1.361 million units in April.
- Building permits dropped 4.7% to 1.412 million units, signaling potential softening in future construction.
- Single-family starts declined 2.1% to 927,000 units, the lowest level since July 2023.
- Multifamily starts surged 13% to 420,000 units.
- Permits for single-family homes fell 5.1% to 922,000 units.
- Permits for multifamily projects dropped 3% to 431,000 units.
- Single-family home completions fell 8% to 943,000 units.
Analysis
April’s increase in total housing starts reflects resilience in the multifamily sector, likely driven by strong rental demand and shifting affordability concerns. Conversely, the sharp decline in single-family starts and permits indicates ongoing pressure from high interest rates, labor shortages, and elevated construction costs.
The drop in permits—a leading indicator of future activity—suggests that housing construction could slow further in coming months, especially in the single-family category. Builders appear to be more cautious, weighing ongoing inflation concerns and tighter credit conditions.
Conclusion
While overall housing starts rebounded in April, the downtrend in single-family construction and building permitspoints to lingering challenges for homebuilders. The multifamily sector remains a bright spot, but the broader outlook for residential construction remains mixed heading into the summer.
