April Housing Permits at Slowest Pace in a Decade
Housing starts moved up slightly in April while new building permits dropped to their slowest pace since June 1997, according to figures released by the Commerce Department on May 16.
Housing starts rose 2.5% in April to a seasonally adjusted annual rate of 1.528 million units, following downward Commerce Department revisions for the two previous months. Starts were down 16.1% from a year earlier.
Building permits, a more reliable indicator than starts of the current trend in housing construction activity, dropped 8.9% in April to a seasonally adjusted annual pace of 1.429 million units. Permits were down 28.1% from a year earlier.
“Builders are adjusting to the adverse impacts of tighter lending standards on home sales and cancellations by cutting back on the number of new permits and working down their backlog of unused permits,” said NAHB President Brian Catalde. “NAHB’s single-family Housing Market Index has been declining since February and builders are bracing for the challenges ahead.”
“The pattern of building permits clearly shows that the dramatic downward correction in housing production still is underway,” said NAHB Chief Economist David Seiders. “Home buyer demand has been sent into another down leg by the abrupt tightening of mortgage lending standards, and there is an increasingly heavy supply of vacant housing units on the market. Under these conditions, builders are cutting back on new construction and intensifying their efforts to bolster sales and limit cancellations.”
Starts of new single-family homes were up 1.6% in April to a seasonally adjusted annual rate of 1.225 million units. The pace was 18.9% below a year earlier. Multifamily housing construction increased 6.3% to a seasonally adjusted annual rate of 303,000 units for the month, a 2.6% decrease from April 2006.
Regionally, new home and apartment starts in the Northeast and West were up by 31.3% and 7.8%, respectively. Housing starts fell 0.1% in the South and 14.2% in the Midwest. All four regions reported a construction pace well below a year earlier.
April’s single-family permit issuance was down 6.0% to an annual rate of 1.063 million units for the month, which was 28.8% below a year earlier. The pace of multifamily permit issuance dropped 16.4% to 366,000 units during the month, off 26.1% from a year earlier.
Construction Forecast Conference Now Available on the Internet
The simultaneous Webcast of the Construction Forecast Conference — Spring 2007 held in Washington, D.C. on April 26 is available for purchase for the next three months.
Those interested can purchase the conference Webcast, which includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
Purchasers will receive unlimited access to the Webcast archive for three months, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections.
To Purchase the Webcast
To purchase the Webcast, visit www.nahb.org/cfcwebcast.
Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.