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U.S. housing starts rose in April and construction of single-family and multi-family homes picked up pace, further evidence that the residential real estate market is gradually recovering.
Housing starts rose 2.2 percent to an annual rate of 1.4 million units in April, according to official data released on Wednesday. Single-family homebuilding rose 1.6 percent to the highest level this year, thanks entirely to gains in starts in the West.
Building permits, a proxy for future construction activity, fell 1.5% to an annual rate of 1.42 million units.
| index | Actual (seasonally adjusted) | expected |
| total housing starts | 1.4 million | 1.4 million |
| Single-family housing starts | 846,000 | N/A |
| Total Building Permits | 1.42 million | 1.43 million |
| Single Family Residential Permits | 855,000 | N/A |
Builders are taking advantage of a lack of supply of existing homes to ramp up construction of new homes, and some are offering homebuyers financing deals to ease housing prices amid buoyant demand for new homes. It also helped homebuilder sentiment hit a 10-month high.
Still, would-be buyers face a number of headwinds, including only modest falls in home prices, still-high mortgage rates and tighter lending standards.
While Fed officials have signaled a possible pause in policy tightening as early as next month, it is unclear how long rates will remain elevated.
Single-family home starts surged nearly 60% in the West after falling sharply in the previous month.
The number of completed homes fell to an annualized rate of 1.38 million units. The number of single-family homes under construction fell 1.4% to 698,000 units.
The housing starts data will help economists estimate the impact of residential construction on gross domestic product in the second quarter. Ahead of the report, the Atlanta Fed’s GDPNow indicator predicted that residential investment would drag economic growth by 0.25 percentage points.
Existing home sales data for April will be released on Thursday, followed by a report on new home sales next week.
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Editor in charge: Liu Mingliang