About That Strong April Recovery: Housing Starts And Permits Flop, March Revised Lower

The much ballyhooed second quarter recovery is firing on about 1/2 cylinder out of 4.

April housing starts came in at 1.172 million Seasonally Adjusted Annualized (SAAR), were well under the Econoday consensus estimate of 1.256.

March was also revised lower from 1.215 million to 1.203 million.

A topping out from lower-than-indicated expansion highs is the news from the April housing starts report where levels, though still healthy, are disappointing. Starts fell 2.6 percent to a 1.172 million annualized rate that is well below Econoday’s low estimate for 1.215 million. Downward revisions are a factor in the report, totaling 27,000 in the prior two months.

The strength in the report is in the key single-family component with starts up 0.4 percent to a rate of 835,000. Otherwise, however, the report is filled with minus signs. Permits for single-family homes fell 4.5 percent to a 789,000 rate with completions also down 4.5 percent, to 784,000.

The sharpest weakness comes from multi-family homes where starts fell 9.2 percent to a 337,000 rate. Permits did rise 1.4 percent to 440,000 but completions dropped 17.2 percent to a 322,000 rate.

April was supposed to be a rebound month for the economy. It was for the jobs report but bounces in last week’s retail sales and consumer price reports were minimal with today’s report an outright negative for the second quarter. Still most housing data, especially sales, have been showing significant strength going into the spring sales season.

April Permits, Starts, Slip from March Levels

Mortgage News Daily reports April Permits, Starts, Slip from March Levels

Permits for privately owned housing units were at a seasonally adjusted annual rate of 1,229,000 units, a decline of 2.5 percent from the estimated 1,260,000 permits issued in March. Analysts polled by Econoday had expected permits to be much higher, a range of 1,255,000 to 1,290,000, with a consensus of 1,271,000. Permitting for the month did remain above the annual rate of 1,163,000 in April 2016, an increase of 5.7 percent.

Housing starts in April were at a seasonally adjusted annual rate of 1,172,000 units, a 2.6 percent decline from March. The original March estimate of 1,215,000 starts was revised down to an annual rate of 1,203,000. The April estimate was 0.7 percent higher than the estimate a year earlier of 1,164,000.

Analysts were way wide of the mark. They expected starts to be in the range of 1,215,000 to 1,290,000. Their consensus was 1,256,000

Completions were at a seasonally adjusted rate of 1,106,000, 8.6 percent below the estimated 1,210,000 rate in March but 15.1 percent higher than in April 2016. Single family completions, at 784,000, represented a loss of 4.5 percent for the month but were up 10.1 percent year-over-year. While multi-family completions were up by 24.6 percent from a year earlier, to an annual rate of 299,000 units, they lost 19.8 percent compared to March.