Housing Starts Dip 7.4 Percent in April
Total housing starts dipped 7.4% in April to a seasonally adjusted annual rate of 1.849 million units, according to figures released by the Commerce Department last week, leaving new-home construction for the first four months of the year down 0.8% from the same period of 2005.
Single-family housing starts declined 5.6% last month to a pace of 1.535 million units and multifamily construction slid 15.1% to a 314,000-unit rate.
“NAHB’s surveys of builders have been showing a slow decline in confidence since the middle of last year,” said NAHB President David Pressly, “and builders have been trimming production of new units to maintain balance between supply and demand. Builders are reacting properly to market conditions.”
“The declines in starts and permits for April reflect a natural pay-back 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% 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 rose 9.1% in the Northeast and 16.3% in the Midwest, in both cases following sizeable declines in March. Starts were down 9.7% in the West and 16% in the South.
Building permit issuance slowed 5.4% in April to a seasonably adjusted annual rate of 1.984 million units, reflecting sizeable declines in the Northeast, Midwest and South and a small increase in the West. Single-family permits were down 4% to an annual pace of 1.502 million units and multifamily permits dipped 9.4% to 482,000 units.
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Seiders Says, 'Builders Have Not Lost Touch With Demand' on the NAHB Economics Blog
NAHB Chief Economist David Seiders says that "builders have not lost touch with demand" on NAHB's economics blog, “Seiders on Housing” — an informal Internet-based forum dealing with economic issues, housing trends, survey research and other topics affecting the housing sector of the economy.
Log onto the blog at http://nahbblog.blogs.com and get direct access to Seiders' expert opinions, projections and responses. Then let Seiders know what you think by giving your perspective.