Housing starts fall 10.6% as uncertainty continues

WASHINGTON: Nationwide US housing starts fell 10.6% in April to a seasonally adjusted annual rate of 523,000 units as concerns regarding competition from foreclosures, a lack of consumer confidence in the housing market and the inability to secure production credit caused builders to slow production, according to newly released figures from the US Commerce Department.

"While mortgage rates are low and house prices are as affordable as they've been in a generation, the decline in April's housing starts is indicative of the low level of confidence that consumers have in the housing market," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder.

"Consumers have not yet reached a level of confidence that is strong enough to begin lifting the housing market," added NAHB chief economist David Crowe in a statement. "The fundamentals — such as economic growth and employment — are beginning to shape up and will eventually provide enough momentum to push housing forward at a healthy pace. But until then, builders are unwilling to move forward. The issuance of housing permits, an indication of future housing activity, has remained at about the same level as 1Q of the year."

Single-family starts declined 5.1% to a seasonally adjusted annual rate of 394,000 units in April, while multifamily starts — which tend to display greater volatility on a month-to-month basis — dropped 24.1% to a rate of 129,000 units after rising 30.8% the month before.

Regionally, starts declined 4.8% in the Northeast and 23% in the South but increased 15.7% in the Midwest and 3.7% in the West.

Total permit issuance for new homes fell 4% to 551,000 units for the month. The single-family sector posted a 1.8% drop to 385,000 units while the multifamily sector posted an 8.8% drop to 166,000 units. Regionally, permit issuance was unchanged in the Northeast and declined 5.3% in the Midwest, 5.7% in the South and 0.8% in the West.