April Single-Family Starts Rise for Second Straight Month
Production of single-family homes edged upward in April as builders responded to improving conditions for new-home buyers, according to figures released by the U.S. Commerce Department on May 19.
While overall starts for April fell 12.8% to a record-low seasonally adjusted annual pace of 458,000 units, the decline was entirely in multifamily housing, which fell 46% to a 90,000-unit pace. Single-family starts advanced 2.8% to a yearly rate of 368,000 units.
“With some of the best home-buying conditions of a lifetime now in place — including historically low mortgage rates, affordable prices and a first-time home buyer tax credit — single-family builders are starting to see the light on the horizon as more consumers realize they can now obtain the home of their dreams,” said NAHB Chairman Joe Robson. “Meanwhile, the extreme difficulty that builders are encountering in obtaining financing for new multifamily structures has brought production in that sector almost to a halt.”
“A severe credit crunch for acquisition, development and construction financing and a lack of investor interest in Low Income Housing Tax Credits are the main factors keeping apartment builders from moving ahead with new projects, along with the competition from excess inventory that’s on the market,” noted NAHB Chief Economist David Crowe. “Ultimately, the logjam in builder financing must be broken in order for housing construction to provide the boost that the national economy needs to get back on track.”
Meanwhile, improving activity in the single-family sector aligns with what builders have been reporting in recent NAHB surveys, Crowe said. “Very attractive housing affordability factors — particularly the federal $8,000 first-time home buyer tax credit and other tax credits being offered by states for purchases of newly constructed homes — are helping drive potential buyers back into the market,” he said.
Single-family housing starts rose for a second consecutive month in April. At the same time, issuance of single-family permits, which can be an indicator of future building activity, rose 3.6% to a 373,000-unit annual pace.
Multifamily permits in April dropped nearly 20% to 121,000 units.
Regionally, total housing starts declined in April across every part of the country except the West, where a 42.5% surge in production offset a nearly equivalent decline in the previous month. Starts fell 30.6% in the Northeast, 21.4% in the Midwest and 21.1% in the South, stemming largely from big declines in the more volatile multifamily sector.
Similarly, regional permit issuance was down everywhere in April except the West, which showed no change from the prior month. Total residential permits were down 7% in the Northeast, 4.8% in Midwest and 3.4% in the South.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
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Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
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