New-home construction sank another notch in April as a weak spring selling season and bad weather led builders to start fewer homes and pull fewer permits. The numbers, released by the Commerce Department Tuesday, also were skewed by revisions in the March data that exacerbated percentage-decline comparisons.
Housing starts fell to a seasonally adjusted annual rate of 523,000 in April, 10.6% below the revised March estimate of 585,000 and 23.9% below the revised April 2010 rate of 687,000. The March estimate was revised upward by 6.5% from 549,000. Single-family starts were down 5.1% to a rate of 394,000, 30.4% behind the pace of April, 2010. Multi-family starts were down 28.3% from March to 114,000, which was 5.6% ahead of last April.
Wall Street was expecting a rate of 570,000.
Permits also were down in April, dropping 4% to a seasonally adjusted annual rate of 551,000, 4.0% below the revised March rate of 574,000 and 12.8% below the revised April 2010 estimate of 632,000. The March estimate was revised downward from the previously reported rate of 594,000. Single-family permits fell 1.8% to 385,000 from March's 392,000. That figure was revised downward from 405,000. Year-over-year, single-family permits were down 18.6%. Multi-family permits were down 13.9% to a rate of 143,000, 2.1% ahead of last April.
New homes under construction fell 0.9% in April to a pace of 418,000, 14.5% behind last April, with single-family down 1.6% to a pace of 249,000, 19.2% below a year earlier. Both were new lows for the seasonally adjusted data.
Regionally, the South, by far the largest region, dragged the rest of the county down with declines of 23% to a pace of 255,000 starts overall and a drop of 7.6% in single family starts to a rate of 208,000. Total starts were 31.8% off last April's pace; single-family stars were 34.4% behind the April 2010 rate.
In the Northeast, total starts fell 4.8% from March to a rate of 60,000, 29.4% off last year's pace, but single-family rose 12.8% to a rate of 44,000, which was still 22.8% behind last April. In the Midwest, total starts were up 15.7% to 96,000, 19.3% behind last year, with single-family down 7.1% to 65,000, 30.1% off last April's pace. The west was up 3.7% to 112,000, 2.8% ahead of last April, with single-family down 4.9% to 77,000, 22.2% off the pace of April 2010.
Permits also were down in the South, with a 5.7% drop overall to a pace of 279,000, 11.7% behind last April, and single-family permits down 4.7% to an annual rate of 205,000, 19% behind the same time last year. The Northeast was flat with March at 60,000, 16.7% behind last year's pace, with single-family down 2.7% to 36,000, 23.4% below last April. The Midwest was down 5.3% overall at 89,000, 23.3% behind last year, with single-family flat with March at 64,000 bit 17.9% behind last April. The West was down 0.8% overall at a pace of 123,000, 3.9% off last year's pace, with single-family up 5.3% at 80,000, 15.8% behind last year.
Michael Rehaut, home building analyst at J.P. Morgan, was disappointed in the data but remained positive on the builder sector. "While modestly disappointing, aside from our view that there is the potential for an upward revision of this number as was the case for March, we believe these April starts numbers nonetheless demonstrate a stable to slightly improving housing market, as these levels are slightly above February's 518K starts and 534K permits," he wrote in a research alert. "Moreover, we point to several other data points that indicate a stable to modestly improving trend in the housing market, including the NAHB Survey remaining in a consistent range of 16-17 since November, and the MBA Purchase Applications Index improving from 180 in Feb. to 190 in March and 194 in April. Also, we believe supply continues to remain manageable, as existing homes for sale are 22% below peak levels and foreclosures continue to liquidate at a moderate pace."