Housing Starts Up, But Permits Drop in Signal of Future Housing Decline
Housing starts were up in April, marking the fourth month of increases, according to a joint release by Commerce Department’s Census Bureau and the Department of Housing and Urban Development (HUD). According to the joint release (download here), privately owned housing starts in April were at a seasonally adjusted annual rate of 672,000. That’s up from the upwardly revised March estimate of 635,000 and is 40.9% above the revised April 2009 rate of 477,000. Housing starts for the single-family sector were at a rate of 593,000 in April, up 10.2% above the upwardly revised March estimate of 538,000. The April rate for buildings with five or more units was 68,000, down 23.6% from March’s upwardly revised estimate of 89,000. Privately owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 606,000, that’s down 11.5% from the unrevised March rate of 685,000, but 15.9% above the revised April 2009 estimate of 523,000. Single-family permits in April were at a rate of 484,000, down 10.7% from the revised March estimate of 542,000. The rate for buildings with five or more units was 103,000, down 14.9% from the revised estimate of 121,000. Paul Ashworth, a senior US economist at Capital Economics, said much of the run-up in new construction was due to the homebuyer tax credit. “The drop in building permits issued to 606,000, from 685,000, suggests that the latest rise in housing starts may be short-lived. Now that the tax credit has expired, we anticipate that home sales will drop back and that, consequently, housing starts will also fall,” Ashworth said. Privately owned housing completions in April were at a seasonally adjusted annual rate of 769,000, that’s 19.2% above the downwardly revised March estimate of 645,000, but is 8.7% below the revised April 2009 rate of 842,000. Single-family completions were at a rate of 564,000, up 14.6% from the downward revised March estimate of 492,000. The April rate for building with five or more units was 192,000, up 33% from the downwardly revised March estimate of 144,000. Write to Austin Kilgore.