Housing market declines in April; NAHB predicts continued "evolving slowdown"
Both single and multifamily housing starts fell: single-family starts dropped 5.6 percent to a pace of 1.535 million units, while multifamily housing construction plummeted 15.1 percent to a seasonally adjusted rate of 314,000 units. The National Association of Home Builders said the declining market was a natural response to "evolving market conditions."
"The declines in starts and permits for April reflect a natural payback for the weather-related surge in production earlier in the year, as well as builder adjustments to eroding demand and rising inventories," said NAHB chief economist David Seiders. "We continue to believe that the evolving slowdown represents an orderly adjustment toward more sustainable levels of housing production, following the record surge in 2005 that was fueled by extraordinary demand for single-family homes and condo units by investors/speculators."
He added that NAHB is forecasting a 6.1 percent decline in total housing starts this year, as the market levels out from the equivalent increases last year.
The regional patterns of housing starts were mixed in April. Construction of new homes and apartments rose 9.1 percent in the Northeast and 16.3 percent in the Midwest, in both cases following sizeable declines in March. Housing starts were down 16.0 percent in the South and 9.7 percent in the West.
Issuance of total building permits decreased 5.4 percent in April to a seasonably adjusted annual rate of 1.984 million units, reflecting sizeable declines in the Northeast, Midwest and South along with a small increase in the West. Single family permit issuance was down 4.0 percent on a national basis to a pace of 1.502 million units. The pace of multifamily permit issuance dipped 9.4 percent to a pace of 482,000 units for the month.