ConDig (16-May-19). Construction of new homes in the US increased 5.7% in April as single-family and multifamily starts rose amid positive signs for the housing sector at the start of the second quarter.
Residential starts hit 1.24 million last month after a 1.7% gain in March was previously reported as a drop, according to latest figures from the US Housing and Urban Development and Commerce Department.
Single-family starts rose 6.2% to 854,000 units, while the multifamily sector, which includes apartment buildings and condos, increased 4.7% to 381,000.
“Builders remain cautious due to affordability concerns,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB).
“But as our builder confidence survey shows, their expectations indicate consumers will respond to lower interest rates moving forward and the housing market will continue on a slow, steady climb.”
Housing permits, which are a sign of future construction activity, edged up 0.6% to a 1.3 million unit annualized rate in April. It comes as single-family permits fell 4.2% to 782,00, the lowest level since October 2016. Multifamily permits increased 8.9% to 514,000.
Regionally, combined single-family and multifamily starts in April rose 84.6% in the Northeast and 42% in the Midwest. Starts dropped 5.7% in the South and 5.5% in the West.
Home builders continue to raise concerns over a deepening skills shortage across the construction industry, while material costs have been boosted following a decision by President Trump to slap a 25% tariff on imported steel and a 10% duty on foreign aluminum from Canada, Mexico and the European Union on May 31.