Residential Construction Disappoints in April
Residential construction activity in April was a mixed bag in April as permits and starts fell short of economists’ expectations while completions jumped to the second highest level in the last 18 years, according to the latest data from the Census Bureau.
- Building permits: 1.44 million (seasonally adjusted annual rate)
- Down 3.0% from March
- Lowest level since January 2023
- Housing starts: 1.36 million (seasonally adjusted annual rate)
- Up 5.7% from March
- Below economists’ projection of 1.42 million
- Housing completions: 1.623 million (seasonally adjusted annual rate)
- Up 8.6% from March
- Second highest level in the last 18 years
The big picture: The decline in building permits and the lower-than-expected housing starts suggest a cooling in the housing market.
Details:
- Building permits, a forward-looking indicator, dropped to 1.44 million, marking a 3.0% decrease from March’s revised rate. This is the lowest level since January 2023, indicating potential future slowdowns in construction activity.
- Housing starts increased to 1.36 million, a 5.7% rise from the previous month. However, this figure fell short of the 1.42 million that economists had projected, highlighting ongoing challenges in the market.
- Housing completions surged to 1.623 million, an 8.6% increase from March and the second highest level seen in the last 18 years, reflecting a push to finish existing projects.
What to watch: The decline in building permits may signal further slowing in new construction in the coming months. Analysts will be closely monitoring whether this trend continues and how it might impact the broader housing market and economic conditions.
The bottom line: While housing completions showed strong growth, the dip in building permits and below-expected housing starts point to a potentially cooler housing market ahead.
