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U.S. Housing Starts and Permits (April 2024)

Andrew Foran, Economist | 416-350-8927

Date Published: May 16, 2024


Housing starts rise, permits fall in April

  • Housing starts rose 5.7% month-on-month (m/m) in April to 1.36 million (annualized) units, coming in below the consensus forecast of 1.42 million. Revisions to the two prior months subtracted roughly 36k units from the previous reported tallies.
  • The uptick in starts was the result of a sharp increase in multi-family starts, which increased 30.6% m/m (or 77k units) – the largest increase in over three years. In contrast, single-family starts fell modestly by 0.4% (or 4k units).
  • Residential permits fell by more than expected in April – declining 3.0% m/m to 1.44 million annualized units. Single-family permits fell 0.8% m/m, marking a third consecutive month of declines, while multi-family permits fell 7.4% m/m.
  • Among the four Census regions, declines were seen in the Northeast (-22.6% m/m) and the South (-2.5%), while gains were recorded in the Midwest (+19.1% m/m) and the South (+10.1%).

Key Implications

  • Homebuilding activity improved in April, but this was primarily driven by volatility in the multi-family segment which recorded a 38.8% decline in March followed by a 30.6% increase in April. Overall, multi-family starts remain subdued amid a healthy supply pipeline, with permitting activity suggesting this is likely to continue moving forward. Single-family starts have also seen some moderation over the past few months but have remained above 1 million annualized units for the past six months, a level that they had not previously recorded since the first half of 2022.
  • Overall, the upward trend in interest rates has weighed on demand and increased financing costs for homebuilders. This resulted in the National Association of Homebuilders sentiment index falling to its lowest level since January in May. With the timing of Federal Reserve rate cuts being pushed back into the second half of the year, higher interest rates are expected to continue to weigh on homebuilding over the coming months.