Nationwide housing starts fell 10.6 percent in April to a seasonally adjusted annual rate of 523,000 units as concerns regarding competition from foreclosures, a lack of consumer confidence in the housing market and the inability to secure production credit caused builders to slow production, according to newly released figures from the U.S. Commerce Department.
“While mortgage rates are low and house prices are as affordable as they’ve been in a generation, the decline in April’s housing starts is indicative of the low level of confidence that consumers have in the housing market,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev.
“Consumers have not yet reached a level of confidence that is strong enough to begin lifting the housing market,” said NAHB Chief Economist David Crowe. “The fundamentals – such as economic growth and employment – are beginning to shape up and will eventually provide enough momentum to push housing forward at a healthy pace. But until then, builders are unwilling to move forward. The issuance of housing permits, an indication of future housing activity, has remained at about the same level as the first quarter of the year.”
Single-family starts declined 5.1 percent to a seasonally adjusted annual rate of 394,000 units in April, while multifamily starts – which tend to display greater volatility on a month-to-month basis – dropped 24.1 percent to a rate of 129,000 units after rising 30.8 percent the month before.
Regionally, starts declined 4.8 percent in the Northeast and 23.0 percent in the South but increased 15.7 percent in the Midwest and 3.7 percent in the West.
Total permit issuance for new homes fell 4.0 percent to 551,000 units for the month. The single-family sector posted a 1.8 percent drop to 385,000 units while the multifamily sector posted an 8.8 percent drop to 166,000 units. Regionally, permit issuance was unchanged in the Northeast and declined 5.3 percent in the Midwest, 5.7 percent in the South and 0.8 percent in the West.