U.S. Housing Starts and Permits (March 2019)

Housing starts step up in April

• U.S. housing starts in April rose 5.7% to 1.24 million units (annualized) from a notable upwardly revised 1.17 million units in March.
• The increase was broad based, with both single and multi-family starts coming in higher. Single-family starts rose by 6.2% to 854k, while the more volatile multi-family segment posted a gain of 4.7% to 381k.
• Permits advanced by 0.6% in April to 1.3 million after three consecutive months of declines. The gain was concentrated in the multi-family segment which was up 8.9%. Single family permits posted its fifth consecutive decline at -4.2%.
• On a regional basis, the outturn was evenly split with significant gains posted in the Northeast (+84.6%), and Midwest (+42.0%), while declines were recorded for the West (-5.5%) and the South (-5.7%).

Key Implications

• Housing starts in April continue to build on modest gains observed in March – reversing the decline that was previously reported for that month. Looking beneath the headline print, the increase was spread across both market segments and featured sizeable gains in two out of four regions.
• Both starts and permits were the strongest they have been in three months, suggesting that despite headwinds faced by the industry, the prospects for greater output in the sector, which has been going through a soft patch of late, is looking better. In fact, homebuilder sentiment reached a seven month high in May.
• On the demand side, moderating homes prices, falling mortgage rates and higher wages should continue to buoy demand as the busy Spring season picks up.

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.