Nationwide housing production gained 2.6 percent from an upwardly revised pace in March to hit a seasonally adjusted annual rate of 717,000 units in April, according to newly released figures from the U.S. Census Bureau and HUD. This modest gain was seen in both the single- and multifamily sectors, which registered growth of 2.3 percent and 3.2 percent, respectively.
“April’s increase in housing production comes on top of strong upward revisions to the previous month’s data, and is an encouraging sign that we are returning to a gradual, upward trend that should continue in the year ahead as builders respond to improving demand for new homes in certain markets,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “Unfortunately, overly restrictive lending conditions for builders and buyers are slowing the pace of this trend considerably.”
“While still less than half the pace of what we would expect in a fully healthy market, the rate of housing production in April was very solid for this point of the recovery and in keeping with the findings of our latest builder surveys that have registered modest improvements in buyer traffic and near-term sales expectations for single-family homes,” said NAHB Chief Economist David Crowe.
The 2.6 percent gain in housing production this April was due to a 2.3 percent increase on the single-family side to a seasonally adjusted, annual rate of 492,000 units and a 3.2 percent increase on the multifamily side to a 225,000-unit rate.
Regionally, starts were mixed in April, with the Midwest and South posting gains of 6.7 percent and 11.6 percent, respectively, and the Northeast and West posting respective declines of 20.7 percent and 8.1 percent.
Permit issuance – which can be an indicator of future building activity – fell 7.0 percent to a seasonally adjusted annual rate of 715,000 units in April following an unsustainably large gain in the previous month. The decline was entirely on the more volatile multifamily side, where permits fell 20.8 percent to a 240,000-unit rate that is essentially back to trend. Single-family permits gained 1.9 percent to 475,000 units.
Regionally in April, permit activity held unchanged in the Northeast while declining 12.3 percent in the Midwest, 3.2 percent in the South and 13.9 percent in the West, respectively.