Overall housing starts increased 5.7% in April to a seasonally adjusted annual rate of 1.36 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, but the annual rate of single-family starts decreased slightly in April. The National Association of Home Builders pointed out that the decrease was concurrent with interest rates moving above 7% and builders dealing with tighter lending conditions.
Although single-family starts decreased 0.4%, to a 1.03 million seasonally adjusted annual rate, that rate is 17.7% higher than in April 2023. On a year-to-date basis, single-family starts were up 25.7%, totaling 335,600. The multifamily sector increased 30.6%.
“While the start of the year has seen an expansion for single-family home building because of a lack of existing home inventory, home building activity leveled off in April as higher interest rates, tighter lending conditions and lower home building sentiment acted as headwinds on new home construction,” said Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kan. “Lower interest rates, particularly for builder and developer loans, will help builders to increase the pace of home construction in the months ahead.”
“Moving forward, the multifamily market will see additional declines for construction volume, while the pace of completions remains elevated,” said NAHB Chief Economist Robert Dietz. “April marked the fifth consecutive month for which the seasonally adjusted rate of multifamily completions was above 500,000. This additional rental supply will help lower shelter inflation, which is the last leg of the inflation policy challenge.”
Combined single-family and multifamily starts were 24.5% lower in the Northeast, 11.0% higher in the Midwest, 1.8% higher in the South and 8.4% higher in the West.
