Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights housing starts.
- The Census Bureau released monthly figures for housing starts this morning. The seasonally adjusted figure for April fell 10.6% to 523,000 units.
- Both the single-family and multi-family sectors tumbled in April falling 5.1% and 24.1%, respectively. Total permits eased 4.0%. Permitting has experienced wide swings in 2011 and fell in 3 of the last 5 months. The tepid trend for permits reflects builder confidence which remained weak in May as reported yesterday by the NAHB.
- The decline in construction has a mixed impact. Construction was an important source of both income and job growth during most of the recent economic expansions and job creation will remain muted until the construction sector reemerges. However, there is a large reserve of distressed properties on the market. Limited construction caps the new supply, better enabling the market to handle the excess supply until market conditions improve. In the meantime, the decline in new construction will retard new home sales in the near term as there are fewer new homes to be sold.