In April, single-family starts remained stagnant as interest rates rose above 7% and builders faced stricter lending conditions. Despite this, overall housing starts saw a 5.7% increase to a seasonally adjusted annual rate of 1.36 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The April reading of 1.36 million starts represents the number of housing units builders would commence if development maintained this pace for the following 12 months. Within this overall figure, single-family starts decreased by 0.4% to a 1.03 million seasonally adjusted annual rate. However, this pace is still 17.7% higher than the same period last year. On a year-to-date basis, single-family starts have increased by 25.7%, totaling 335,600.
Meanwhile, the multifamily sector - encompassing apartment buildings and condos - experienced an increase of 30.6% to an annualized pace of 329,000.
“While the start of the year has seen an expansion for single-family home building due to a lack of existing home inventory, home building activity leveled off in April as higher interest rates, tighter lending conditions and lower home building sentiment acted as headwinds on new home construction,” stated Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kan.
He further noted that lower interest rates for builder and developer loans would help increase the pace of home construction in future months.
On another note, NAHB Chief Economist Robert Dietz predicted additional declines for construction volume in the multifamily market while completions remain high.
“April marked the fifth consecutive month for which the seasonally adjusted rate of multifamily completions was above 500,000," Dietz said. "This additional rental supply will help lower shelter inflation, which is the last leg of the inflation policy challenge.”
On a regional and year-to-date basis, combined single-family and multifamily starts are 24.5% lower in the Northeast, 11.0% higher in the Midwest, 1.8% higher in the South and 8.4% higher in the West.
Overall permits decreased by 3.0% to a 1.44 million unit annualized rate in April. Single-family permits decreased by 0.8% to a 976,000 unit rate; this is the lowest pace since August 2023. Multifamily permits saw a decrease of 7.4% to an annualized pace of 464,000.
Looking at regional data on a year-to-date basis, permits are up by 9.3% in the Northeast, 8.5% higher in the Midwest, 2.8% higher in the South and marginally higher (0.2%) in the West.
After peaking at 1.02 million apartments under construction in July 2023, active multifamily units under construction have been declining rapidly—down to 934,000 in April.
The Census Bureau and HUD noted revisions to their data: unadjusted estimates of housing units authorized by building permits for January 2022 through December 2023 have been revised as well as seasonally adjusted estimates dating back to January 2017.
