Single-family housing starts lagged behind overall housing starts in April due to higher interest rates and lower builder sentiment, according to the National Association of Home Builders (NAHB).
While the U.S. Census reported overall housing starts increased 5.7% in April to a seasonally adjusted rate of 1.36 million units, single-family starts remained flat in April.
“The April reading of 1.36 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months,” the NAHB said in a press release.
“While the start of the year has seen an expansion for single-family home building because of a lack of existing home inventory, home building activity leveled off in April as higher interest rates, tighter lending conditions and lower home building sentiment acted as headwinds on new home construction,” Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kan. commented. “Lower interest rates, particularly for builder and developer loans, will help builders to increase the pace of home construction in the months ahead.”
This marks the second consecutive month of declining single-family housing starts, as March saw a 12.4% drop from February, before revisions.
While the pace of multifamily completions remains elevated, this market will likely see construction declines moving forward, according to NAHB Chief Economist Robert Dietz.
“April marked the fifth consecutive month for which the seasonally adjusted rate of multifamily completions was above 500,000,” Dietz said. "This additional rental supply will help lower shelter inflation, which is the last leg of the inflation policy challenge.”
As of this month builder confidence in the market for newly built single-family homes is even lower, dropping six points from April to 45, the NAHB reported Thursday.
On a regional and year-to-date basis, combined single-family and multifamily starts are 24.5% lower in the Northeast, 11.0% higher in the Midwest, 1.8% higher in the South and 8.4% higher in the West. Overall permits decreased 3.0% to a 1.44 million unit annualized rate in April. Single-family permits decreased 0.8% to a 976,000 unit rate – the lowest pace since August 2023. Regionally YOY permits are 9.3% higher in the Northeast, 8.5% higher in the Midwest, 2.8% higher in the South and 0.2% higher in the West.
