Housing Starts Plummet as Consumer Confidence Wanes

May 18, 2011 (Shirley Allen)

Housing starts fell 10.6 percent nationwide in April to a seasonally adjusted rate of 523,000 units, with housing starts for single-family homes dropping 5.1 percent, and multi-family housing starts dropping a whopping 24.1 percent according to newly released figures from the Commerce Department.

Housing starts dropped from a revised March estimate of 585,000 to a seasonally adjusted rate of 523,000 units in April. Single-family housing starts dropped to a rate of 394,000 units in April compared to March’s revised rate of 415,000. The rate of housing starts for multi-family units dropped from 159,000 units in March to a rate of 114,000 units for April.

“Consumers have not yet reached a level of confidence that is strong enough to begin lifting the housing market,” said NAHB Chief Economist David Crowe. “The fundamentals – such as economic growth and employment – are beginning to shape up and will eventually provide enough momentum to push housing forward at a healthy pace. But until then, builders are unwilling to move forward. The issuance of housing permits, an indication of future housing activity, has remained at about the same level as the first quarter of the year.”

Building permits, an indicator of future building activity, were just as equally dismal as the number of permits for April was issued at a seasonally adjusted rate of 551,000, which was down 4 percent from March’s revised rate of 574,000. Compared to April 2010, building permits are down 12.8 percent, which saw a rate of 632,000 permits issued.

Single-family building permits decreased slightly, by 1.8 percent, to a rate of 385,000 authorizations compared to March’s revised figure of 392,000.

Regionally, housing starts declined 4.8 percent in the Northeast and 23.0 percent in the South but increased 15.7 percent in the Midwest and 3.7 percent in the West.

Tags: housing starts, single-family homes, multi-family dwellings, building permits, consumer confidence

Sources:
Commerce Department
NAHB