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Housing Starts Shaky, Builder Confidence Solid

Phil Hall
May 16, 2018
The U.S. Department of Housing & Urban Development (HUD) has announced joint policy actions designed to reduce its risk profile from cash-out refinance lending

Single-family housing starts in April were at a rate of 894,000, a relatively scant 0.1 percent increase from the revised March figure of 893,000, according to new data from the U.S. Census Bureau and the U.S. Department of Housing & Urban Development (HUD). Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,287,000, a 3.7 percent drop from the revised March estimate of 1,336,000 but a 10.5 percent spike from the April 2017 rate of 1,165,000. 
 
Single-family authorizations in April were at a rate of 859,000, up 0.9 percent above the revised March figure of 851,000. Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,352,000, which 1.8 percent below the revised March rate of 1,377,000 but 7.7 percent above the April 2017 rate of 1,255,000.
 
Single-family housing completions in April were at a rate of 820,000, which is four percent below the revised March rate of 854,000. Privately-owned housing completions in April were at a seasonally adjusted annual rate of 1,257,000, which is 2.8 percent above the revised March estimate of 1,223,000 and 14.8 percent above the April 2017 rate of 1,095,000.
 
“On a month-to-month basis the residential construction market cooled, with housing starts coming in at 1.29 million, a four percent national decline," said Freddie Mac Chief Economist Sam Khater. "The drop was broad based, as construction slowed in three out of the four regions in the US. The April decline was also driven by weakness in multifamily, which experienced a 13% drop in starts relative to March. Single-family essentially remained flat."
 
Despite the relatively stagnant level of single-family housing starts, builder confidence in the market for newly-built single-family homes ratcheted up two points to a level of 70 in May on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
 
The HMI chart gauging current sales conditions increased two points to 76 in May, and the indexes measuring buyer traffic and expectations in the next six months remained unchanged at 51 and 77, respectively. On a regional level, the HMI scores in the West and Northeast held steady at 76 and 55, respectively, as the HMI scores in the South and Midwest each both dropped one point to respective levels of 72 and 65.
 
“Tight housing inventory, employment gains and demographic tailwinds should continue to boost demand for newly-built single-family homes,” said NAHB Chief Economist Robert Dietz. “With these fundamentals in place, the housing market should improve at a steady, gradual pace in the months ahead.”

 
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