Construction of apartment buildings plunged in April, driving total US home building lower amid unseasonable cold weather in much of the country and continuing shortage of workers
Washington (AFP) - US home building slowed in April amid a steep drop in the construction of apartments after a surge in March, according to government data released Wednesday.
The building slowdown – amid shortages of labor and space as well as rising supply costs and inclement weather – suggested April’s housing construction could contribute less than expected to overall economic growth in the second quarter.
Total housing starts fell 3.7 percent for the month to an annual pace of 1.3 million, seasonally adjusted, the Commerce Department said in a monthly report.
The decline appeared larger after an upward revision for March but still disappointed economists, who were expecting a decrease of only 0.8 percent.
The result was still 10.5 percent above the pace of construction in the same month last year.
Construction in the all-important single-family segment held steady, rising only 0.1 percent to a rate of 894,000 units.
But multi-unit dwellings plunged 12.6 percent to 374,000 units, offsetting almost all of the March increase.
Building permits issued for single-family homes – one of the most closely watched figures in the monthly report, as it signals construction in the pipeline – fell 1.8 percent, matching analyst expectations.
“The details are better than the headlines because all the decline in both starts and permits is in the volatile multi-family sector, where activity was very elevated in March and has now corrected,” said Ian Shepherdson of Pantheon Macroeconomics.
Homebuilding jumped 17.2 percent in the South, the lone region to see an increase – but plunged nearly 30 percent in the Midwest, where single-family construction fell faster than apartments.
The construction figures are subject to a high degree of uncertainty and officials caution that a trend may take as many as six months to appear.
But construction has been largely flat since late 2017 and analysts say rising mortgage rates, mounting prices and heavier property tax burdens in some states could depress sales, holding down building activity as a result.
The data did little to move financial markets.