Housing Production Falls as Costs Climb
Housing production decreased 9.5 percent in April to a seasonally adjusted annual rate of 1.57 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 1.57 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 13.4 percent to a 1.09 million seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 0.8 percent to a 482,000 pace.
"Housing starts and permits posted a monthly decline in April, as escalating prices for lumber and other building materials price out some home buyers from an otherwise hot housing market," says Chuck Fowke, NAHB chairman. "Policymakers need to prioritize the U.S. supply chain for items like building materials to ensure builders can add the additional inventory the housing market desperately needs."
"The decline in single-family permits indicates that builders are slowing construction activity as costs rise," says Robert Dietz, NAHB chief economist. "While housing starts were strong at the beginning of the year, due to home builders constructing homes that were sold pre-construction, higher costs and limited availability of building materials have now paused some projects."
Overall permits increased 0.3 percent to a 1.76 million unit annualized rate in April. Single-family permits decreased 3.8 percent to a 1.15 million unit rate. Multifamily permits increased 8.9 percent to a 611,000 pace.
The number of single-family homes permitted but not started construction continued to increase in April, rising to 131,000 units. This is 47 percent higher than a year ago.