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Economy in Brief

U.S. Housing Starts Post Record Decline in April
by Tom Moeller  May 19, 2020

• Housing sector continues under pressure due to coronavirus shutdowns.

• Starts decline to five-year low.

• Falling permits suggest more weakness to come.

New residential home building continues to weaken dramatically. Housing starts declined 30.2% (-29.7% y/y) during April to 891,000 (AR) from 1.276 million in March, revised from 1.216 million. Total starts are 43.9% below their January peak. The latest level was the lowest level of starts since February 2015. The Action Economics Forecast Survey expected 930,000 starts for April.

Starts of single-family starts declined 25.4% (-24.8% y/y) to 650,000 last month following a 15.8% March shortfall. It also was a roughly five-year low. Multi-family starts fell 40.5% (-40.2% y/y) to 241,000, the third straight month of sharp decline.

A 20.8% decline (-19.2% y/y) in building permits to 1.074 million units followed a 5.7% March drop. Permits to build single-family homes fell 24.3% (-16.4% y/y) to 669,000, five-year low. Permits to build multi-family dwellings fell 14.2% (-23.6% y/y).

By region, last month's weakness in starts reflected a 43.6% decline (-66.4% y/y) in the Northeast to 44,000. It followed similar declines in each of the prior two months. Starts in the West weakened 43.4% (-43.2% y/y) to 184,000 and added to the 14.5% decline in March. In the Midwest, housing starts fell 14.9% (-20.1% y/y) to 131,000, the third decline in four months. In the South, starts decreased 26.0% (-17.9% y/y) to 532,000 after falling 17.3% in March.

The housing starts and permits figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.

Coronavirus and CARES Act from Fed Chairman Jerome H. Powell is available here.

Housing Starts (000s, SAAR) Apr Mar Feb Apr Y/Y % 2019 2018 2017
Total 891 1,276 1,567 -29.7 1,298 1,250 1,209
  Single-Family 650 871 1,034 -24.8 894 873 852
  Multi-Family 241 405 533 -40.2 404 377 357
Starts By Region
  Northeast 44 78 121 -66.4 116 111 111
  Midwest 131 154 197 -20.1 170 171 181
  South 532 719 869 -17.9 689 631 603
  West 184 325 380 -43.2 322 337 314
Building Permits 1,074 1,356 1,438 -19.2 1,350 1,330 1,286
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