Despite some low numbers, April’s starts and permits report, released today by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, brought better news than many industry watchers had anticipated.
Housing permits fell 7.0% on a monthly basis to an annual rate of 715,000, due to a 20.8% decline in the multifamily sector, which logged an annual rate of 240,000. However, that decline comes on the heels of a 32.3% jump in multifamily permits in March. Because individual units in multifamily projects are issued separate permits, the sector is exposed to large swings as large batches are pulled. Overall, multifamily has been showing a promising upward trend.
Single-family permits moved up for the second consecutive month, gaining 1.9% from March and up 18.5% year-over-year to an annual rate of 475,000.
Housing starts rose 2.6% for the month to an annual rate of 717,000. Single-family starts moved up 2.3% from March and 29.9% year-over-year to reach an annual rate of 492,000. Multifamily starts, with an annual rate of 217,000, logged a 4.3% monthly improvement and were up a whopping 75.0% annually.
“This was a good report,” says Michelle Valverde, U.S. economist at IHS Global Insight. “The good news on starts more than offset the less stellar news on permits. The report shows further signs of life in the housing market, but the state of the single-family housing market, which represents two-thirds of the overall market, remains fragile.”
IHS’s forecasts predict starts this year will rise to 740,000, from 610,000 in 2011. However, due to stubbornly high unemployment numbers and unreliable payroll growth, Valverde doesn’t expect starts to reach the 1.5 million mark until 2014.
To see the full press release for today’s starts and permits report, click here.
Claire Easley is a senior editor at Builder.