Dive Brief:
- Housing starts rose 6.6% in April to a 1.172 million annualized rate, up from the revised 1.099 million rate in March, the Commerce Department reported Tuesday. April housing starts were 1.7% below the April 2015 level.
- New applications for building permits, which predict future construction activity, increased 3.6% in April but were 5.3% below April 2015.
- Multifamily saw the strongest gains last month, with a 10.7% surge. Single-family construction also rose 3.3%.
Dive Insight:
April housing starts surpassed expectations, as economists surveyed by The Wall Street Journal forecast a 3.7% rise. Experts said April's strong results represented "a sign the housing recovery could be finding traction after a slow first quarter."
The strong showing in the multifamily sector once again bucks predictions of a slowdown in apartment construction. In a webinar last month, NAHB Chief Economist Robert Dietz predicted that 2016 will be the first year since the crash that single-family construction will outpace multifamily. However, Dietz pointed out after Tuesday's release that multifamily starts were down nearly 13% year-over-year.
The bump in April housing starts comes one day after the NAHB/Wells Fargo Housing Market Index reported no change in the homebuilder confidence for the fourth consecutive month. The steady nature of the index indicated "that the single-family housing sector remains in positive territory," according to NAHB Chairman Ed Brady.
Today's report will be followed by the existing home sales report on Friday, new home sales on May 24, and pending home sales on May 26.
