May 16, 2017 – Housing starts track the number of new residential construction projects underway over the course of a month. This indicator has implications for demand in construction spending/jobs, consumer wages, and complimentary sectors such as durable household item sales. Along with building permits, housing starts is considered a leading economic indicator.
Housing starts in April came in at an annualized rate of 1.172 million, under expectations of an annualized rate of 1.256 million and 2.6% below March’s downward revision of 1.203 million. Year-over-year starts are now up 5.7%. Single-family starts were one of the only positives this month, rising 0.4%. Permits and completions for single-homes fell 4.5%. Multi-family homes had a sharp decline of 9.2%, while permits were up 1.4% and completions dropped 17.2%.
April housing starts were uncharacteristically below March this year for the spring sales season. Starts fell for the third time in four months. A lower supply of homes could be putting upward pressure on prices. However, starts were above last year’s April and show signs of growing in the next months. Single-family starts grew among decreases in the more volatile multi-family housing, marking a shift to single-family construction. Single-family starts increasing boosts GDP as single-family homes add more value than multi-family units.