The effects of the coronavirus pandemic continued to take a toll on housing construction in April.
Total housing starts slumped 30.2% in April to a seasonally adjusted annual rate of 891,000 units, according to a report from the US Housing and Urban Development and Commerce Department.
The April reading of 891,000 starts is the number of the housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts plunged 25.4% to a seasonally adjusted annual rate of 650,000 – the lowest level since Q1 2015. Meanwhile, the multifamily sector (apartment buildings and condos) was down 40.5% to an annual pace of 241,000.
“While the April numbers were down, they were somewhat better than forecast and are expected to improve as more of the economy reopens,” said NAHB Chief Economist Robert Dietz. “Single-family weakness was particularly seen in the West and Northeast as larger metro areas were under more economic pressure due to the lockdown phase. But as a sign of the strength housing had going into this downturn, single-family starts are still 1.0% higher on a year-to-date basis.”
Overall permits posted a 20.8% decline, down to a 1.07 million-unit annualized rate in April. Single-family permits fell 24.3% to 669,000-unit rate, while multifamily permits tumbled 14.2% to a 405,000 pace.
On a regional level, combined single-family and multifamily starts rose 6.8% year over year in the Midwest, were up 9% in the South, up 7.7% in the West, and fell 1.3% in the Northeast. Regional permits were 7.1% higher in the South and 4.1% higher in the West. Permits in the Northeast and Midwest, on the other hand, were 8% and 3.1% lower, respectively.
“Despite today’s numbers, there is an undercurrent of long-term positivity in the housing market that will likely allow for a strong rebound,” NAHB Chairman Dean Mon said. “Our builder confidence index has already shown signs of a turnaround. Housing was showing signs of momentum before the pandemic and is poised to lead the economic recovery as virus mitigation efforts take hold, and more states take gradual steps to reopen.”