Construction Activity Improves in April on Multi-Family Gains

By Mark Lieberman

Managing Director and Senior Economist


  • Home building activity, measured by housing permits and starts IMPROVED in April, as both starts and permits ROSE;
  • The seasonally adjusted annual rate of permits EDGED UP 0.6 percent to a seasonally adjusted annual rate (SAAR) of 1.296 million; all the increase came in multi-family (almost 40 percent of the total) which ROSE 8.9 percent while the annualized pace of permits for single-family homes FELL 4.2 percent from March;
  • The SAAR of starts ROSE 5.7 percent or 67,000 to 1.235 million. Single-family starts IMPROVED 6.2 percent or 50,000 while the rate of multi-family starts INCREASED 17,000 or 4.7 percent;
  • The rate of total housing completions FELL 19,000 or 1.4 percent. The SAAR of single-family completions DROPPED 39,000 or 4.1 percent, while the pace of multi-family completions ROSE 20,000 or 5.3 percent.


  • Total permit activity rose for the first time this year. The SAAR of permits for single-family homes fell for the fifth straight month, the longest streak of declines since April-September 2010;
  • Single-family permits represented 60.3 percent of all permit filings, the lowest share since November 201 (58.1 percent)5;
  • Year-year, the rate of total permits is down for four straight months and the rate of permits for single-family construction is down for five straight months;
  • The rate of new starts has fallen year-year for six straight months for the first time since the Great Recession when it fell year-year for 44 straight months;
  • Single-family starts were 69.1 percent of the total, below the 71.2 percent historic average for the third straight month;

Data Source: Census Bureau and Department of Housing and Urban Development

Image result for residential construction

The increase in builder confidence reported Wednesday by the National Association of Home Builders (NAHB) became even more mysterious with the Census Bureau’s report Thursday of a decline in both permits and starts for single-family homes.

Perhaps the only bright spot in the report was that the slowdown in building activity will give inventories of unsold homes a chance to correct and reverse the price decline for new homes.

But otherwise the data suggest potential cutbacks in construction sector employment. The number of residential construction jobs barely increased (up less than 1,000) in May, according to the Bureau of Labor Statistics after increasing 11,000 in April.

The confidence report Wednesday showed an uptick in buyer traffic according to builders surveyed but the buyer traffic measure remained the ionly one of three index components to score under 50, the dividing line between positive (over 50) and negative survey readings. The overall index has been in optimistic territory for 63 straight months, just over five years.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

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