Housing starts fell just 0.2% in April, but multifamily starts rose 15.3% to offset the single-family drop. NAHB cites “weaker confidence in the single-family market.”
The single-family housing market continued to show signs of slowing in April as rising mortgage rates and supply chain disruptions continue to take a toll on the housing market.
Due to a surge in multifamily production, overall housing starts held fairly steady, falling just 0.2%, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The April reading of 1.72 million starts is the number of housing units builders would begin if development kept April’s pace for the next 12 months.
Within this overall number, however, single-family starts decreased 7.3%. That drop was moderated in the overall housing-starts score by the multifamily sector, which includes apartment buildings and condos, that increased 15.3%.
“Lower single-family construction starts in April reflect our recent builder surveys showing notably weaker confidence in the single-family market, as rising mortgage rates and building material construction costs drive more potential buyers out of the market,” says Jerry Konter, chairman of the National Association of Home Builders (NAHB).
“President Biden’s plan to address housing affordability challenges is a welcome development,” he adds, “but the administration needs to focus more on resolving rising lumber and building material prices and supply chain bottlenecks that are raising housing costs far faster than wages.”
“Today’s housing starts report is more evidence that the single-family market is slowing,” says NAHB Chief Economist Robert Dietz. “While single-family starts are up 4.1% on a year-to-date basis, we’re expecting flat conditions for (2022) and a decline in 2023 as housing affordability challenges in the form of higher mortgage rates and construction costs continues to worsen housing affordability conditions. Single-family permits are down 2.3% on a year-to-date basis thus far in 2022.”
On a regional and year-to-date basis, combined single-family and multifamily starts are 6.3% higher in the Northeast, 5.2% higher in the Midwest, 13.3% higher in the South and 8.3% higher in the West.
Overall permits – a sign of future housing-start activity – decreased 3.2%. Single-family permits decreased 4.6%, while multifamily permits decreased 1.0%.
Looking at regional permit data on a year-to-date basis, permits are 4.9% lower in the Northeast, 4.0% higher in the Midwest, 3.5% higher in the South and 1.3% higher in the West.
Single-family permits authorized but not started are up 28.7% year-over-year, and single-family units under construction are still growing, up 26% year-over-year.
News Source: Florida Realtors.org