Last Update: 21-May-15 17:40 ET
- Housing starts increased 20.2% in April to 1.135 mln from an upwardly revised 944,000 (from 926,000) in March. The Briefing.com Consensus expected housing starts to increase to 1.019 mln.
- After the subpar first quarter, when housing starts plummeted to some of their worst levels since the middle of last year, construction levels rebounded significantly in April. In fact, the April new home construction report revealed a lot of historic “firsts.” Contrary to most of the economic data thus far in 2015, these “firsts” were the good ones.
- That was the first time starts reached 1.135 mln since November 2007. That was the first time starts increased by at least 20.2% in a month since a 20.9% increase in February 1991. That was the first time starts increased by at least 191,000 since starts rose by 279,000 in January 2006.
- The news gets even better.
- Single-family starts increased 16.7% in April to 733,000 from 628,000 in March. That was the most single-family homes started since January 2008 when 773,000 were started. That was the largest monthly increase, in both percentage and absolute terms, since November 2013.
- Since single-family construction is typically a stable sector, the gain puts housing starts back on its late-2014 path.
- Multifamily construction increased to 402,000 in April from 316,000 in March.The number of homes currently under construction increased 1.5% in April to 853,000 from 840,000 in March.
- Unfortunately for GDP, most of the increase came from the multifamily sector. Spending on a per unit basis in the multifamily sectors is much smaller than on a single-family home. That means the residential investment gain is smaller than if the bulk of the increase in the number of units under construction came from the single-family sector.
- After a big pullback in housing starts in the first quarter, construction levels rebounded in a big way in April. Starts are now back on its 2014 upward path.