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Economy in Brief

U.S. Housing Starts Dip in April but Remain Elevated
by Peter D'Antonio  May 18, 2022

• Single-family starts ease while multi-family improve.

• Starts and permits were revised down sharply.

• Housing construction activity appears to be holding at an elevated range.

Housing starts edged down by 0.2% (14.6% y/y) in April to 1.724 million units from 1.728 million in March. The March figure was revised down sharply from 1.793 million. The Action Economics Forecast Survey expected 1.765 million starts in April, which signaled that economists did not think the surprisingly high reported March figure would hold. The downward revision and slight decline recast the starts figures, suggesting they remained at an elevated range in April.

The pattern of housing construction activity seems to be shifting toward multifamily. Initially after the pandemic lockdowns, single-family starts and permits jumped, but have remained in a range for the past two years. Meanwhile, starts of multifamily dwellings, which are about half the size of single-family units, have been rising steadily. In April, starts of single-family units fell 7.3% (3.7% y/y) to 1.100 million following a dip to 1.187 in March. Multi-family housing starts jumped 15.3% (40.5% y/y) to 624,000 in April, which was a 26-year high.

By region, housing starts remain volatile and mixed. After skyrocketing in March, the Northeast gave back a third of that gain (23.2% m/m) in April to 182,000. Starts in the West rose 3.4% (11.6% y/y) to 432,000. Starts in the Midwest dropped by 22.0% (2.2% y/y) to 184,000 in April. In the South, housing starts increased 10.6% (18.4% y/y) to 926,000 units. The South is the only region showing a noticeable upward trend.

Building permits declined by 3.2% (3.1% y/y) to 1.819 million from 1.879 million in March. Permits to build single-family homes declined 4.5% (-3.7% y/y) in April to 1.110 million units. Permits to build multi-family edged down by 1.0% (15.6% y/y) to 709,000.

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

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