US home building falls sharply in April

Galtero Lara
May 16, 2018

Figures released this morning showed USA home building tumbled in April and permits fell, suggesting the housing market continued to tread water amid shortages of land and skilled labour.

USA builders broke ground on fewer apartment buildings last month, pushing overall home construction down 3.7 percent from March.

Overall housing starts ran at an annualized pace of 1.28 million units, down 3.7 percent from the March level.

Economists had expected housing starts to drop to an annual rate of 1.310 million from the 1.319 million originally reported for the previous month. Building permits fell 1.8 percent to a rate of 1.352 million units last month.

In April, housing starts fell 16.3 percent in the Midwest, 12 percent in the West and 8.1 percent in the Northeast.

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"The drop [month over month] was broad based, as construction slowed in three out of the four regions in the US", said Sam Khater, chief economist for Freddie Mac.

Single-family home building, which accounts for the largest share of the housing market, edged up 0.1% to a rate of 894,000 units last month.

Housing economists have more closely watched trends in single-family building, which has seen below-average building for several years.

Last month's gain in single-family starts was outpaced by an 11.3 percent decline in groundbreaking activity on multi-family housing units. These constraints have left builders unable to plug an acute shortage of houses on the market, restraining home sales growth.

Permits for new single-family homes rose month over month in April from a revised annual rate of 851,000 in March to a seasonally adjusted annual rate of 859,000. Permits for multi-family units fell 6.3 percent to a 493,000 unit-pace.

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