New residential construction posted promising gains in April according to today’s joint release from the Census Bureau and Department of Housing and Urban Development. Preliminary estimates for housing starts show a seasonally adjusted annual rate of 717 thousand units, split between 492 thousand single family units and 225 thousand multifamily units, gains for both sectors. This is the sixth consecutive month with starts near or above 700 thousand.
There was some concern that the slower pace in March was an indication that a warm winter had pulled activity forward and the spring months could be weak as a result, but the strength of the April figures suggests momentum, rather than payback, will be the trend in coming months.
Building permit issuance did slow in April, but the decline was concentrated in the multifamily sector and brought April multifamily permitting more in line with the earlier trend.
Today’s starts numbers were consistent with yesterday’s release of the NAHB/Wells Fargo Housing Market Index (HMI) which showed improving builder sentiment. In particular, builders’ comments referred to increasing traffic in model homes, but also increasing commitment from buyers, in the form of deposits for sales.
This continuing upward trajectory in housing starts and builder sentiment suggests that consumers are regaining their confidence, and bodes well for a strengthening housing recovery.