Housing Starts And Permits Pick Up In April

Housing starts and permits picked up in April but the pace is moderate. Starts rose 6.6 percent to a 1.172 million annualized rate but the year-on-year rate has sunk into the negative column, to minus 1.7 percent. Permits rose 3.6 percent in April to a 1.116 million rate but here too the year-on-year rate is negative, and more so at minus 7.2 percent.

The year-on-year weakness, however, reflects multi-family units which are now cooling following prior strength. Starts for single-family units, which are more expensive to build and offer a core gauge for the housing sector, rose 3.3 percent in April for a year-on-year plus 4.3 percent while single-family permits rose 1.5 percent for a plus 8.4 percent on-year rate.

Regionally, the Midwest is showing the most strength with gains for both starts and permits in the month and on the year. The South follows next in strength with the West lagging and the Northeast, which is already densely developed, far behind.

Momentum in housing looks a little soft this Spring though the sector, as underscored by the strength right now in single-family trends, is still a main positive for what is a modest economic outlook.

Recent History Of This Indicator:
Housing starts & permits are expected to bounce back sharply in April, up 4.2 percent for starts to an annualized 1.135 million rate and up 4.1 percent for permits to 1.130 million. Both starts and permits fell sharply in March and raised questions over momentum going into the Spring housing season. One area of particular concern has been permit weakness in the West which is a key sector for new building. Still, trends in this report, expressed in year-on-year growth rates, are very positive, in the low double digits for starts and the mid-single digits for permits.