New home construction took a blow in April as, although single-family starts saw a slight increase during the month, building permits dropped, according to the latest report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

Privately owned housing starts decreased in April to a seasonally adjusted annual rate of 1.17 million starts. This is down 2.6% from March’s estimate of 1.2 million but up 0.7% from last year’s 1.16 million.

However, single-family housing starts increased slightly in April, rising 0.4% from March’s 832,000 to 835,000.

Privately owned housing units authorized by building permits also decreased in April, falling 2.5% from March’s 1.26 million authorizations to 1.23 million. But this is still 5.7% above last year’s 1.16 million.

And despite the increase in single-family starts, single-family authorizations slipped, falling 4.5% from 826,000 in March to 789,000 in April. This indicated new home starts may soon follow the downward trend.

Privately owned housing completions fell in April to 1.11 million completions, down 8.6% from March’s 1.21 million. However, this represents an increase of 15.1% from last year’s 961,000.

Single-family housing completions dropped 4.5% to 784,000, down from March’s 821,000.

As more homebuyers flood the market and inventory dwindles, the decrease in new home starts is just one more factor that will continue to drive up home prices and increase the competition. 

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