Total housing starts dipped 7.4 percent in April to a seasonally adjusted annual rate of 1.849 million units, according to figures released by the Commerce Department. Year-to-date, new-home construction for the first four months of the year was down 0.8 percent from the first four months of 2005.
Single-family housing starts were down 5.6 percent in April to a pace of 1.535 million units. Multifamily housing construction dropped 15.1 percent for the month to a seasonally adjusted pace of 314,000 units.
"NAHB’s surveys of builders have been showing a slow decline in confidence since the middle of last year, and builders have been trimming production of new units to maintain balance between supply and demand," said David Pressly, president of the National Association of Home Builders (NAHB) and a home builder from Statesville, N.C. "The declines in starts and permits reported today show that builders are reacting properly 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."
"NAHB’s forecast continues to show a 6.1 percent decline in total housing starts for 2006 as a whole, following an equivalent increase last year," Seiders added.
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 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.