Housing Starts Rise 13.2% in April
WASHINGTON (MNI) - The U.S. April housing data look good on their face as the starts total jumped 13.2% to an above-expectations 1.072 million units, but underlying details show that this key market still has a long way to go before being declared healthy.
The 1.072 million unit April starts pace was a continuing advance to the levels seen last November-December, and suggests that the winter slowing might have been due to bad weather. Revisions now show a drop in January starts, followed by a slow climb back.
But this pace is merely at or perhaps just below the pace of household formations and thus represents a steady state.
Also, the key single-family starts metric was up a mere 0.8% to 649,000, still a slow pace. Most of April's starts gain was in multi-family units (+43% for 5+ units) and thus represents investment.
All regions rose overall but single starts were poor in the Northeast (flat) and South (-2.6%).
Permits gained 8% to 1.08 million units, suggesting the higher April pace of starts should be sustained. But the permits average is about one million for the last six months, so the data are not suggesting take-off.
Permits were lower in the Northeast and West in a mixed bag for the country.
Housing completions were 847,000, a dip of 3.9% on the month. This probably reflects the construction delays in the winter. There were
736,000 units under construction during the month, a new cycle high and a 21.3% gain over the year.
Overall, home-buying probably still should be considered slow but improving, and rising units in the pipeline suggest continued housing growth ahead.
**MNI Washington Bureau: Tel. (202)371-2121**