Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

U.S. Housing Starts Fell in April but Stayed Close to Historic Highs

Published 18/05/2022, 15:24
Updated 18/05/2022, 15:24

By Geoffrey Smith

Investing.com -- U.S. housing starts fell in April, but remained at historically high levels, despite growing signs that higher prices and rising mortgage rates are hurting the affordability of home purchases.

Housing starts edged down to 1.724 million last month, below analysts' expectations. Equally important was the downward revision to the figures for March - to 1.728 million from an initial estimate of 1.793 million.

Even at that slightly lower level, new construction is still taking place at a rate not seen since the subprime mortgage boom 15 years ago.

However, the overall figures again illustrated a divergence in trends between single-family home construction and multi-unit construction, with the former weakening more than the latter. That indicates a continuing preference to build the kind of homes that are rented rather than bought, suggesting that more prospective buyers are being priced out of the market. Single-family housing starts fell 7.3% on the month and are now up only 3.7% on the year, while starts for projects with more than five units were up 16.8% from March and are now up 42.3% from April 2021.

Building permits, the more forward-looking indicator of housing market activity, also remained strong in absolute terms in April, despite falling to a five-month low at 1.819 million. While that was slightly lower than the 1.879 million issued in March, it was slightly above expectations.

The numbers come on the same day that the Mortgage Bankers' Association said mortgage applications fell by 11% last week, against a backdrop of a surge in long-term interest rates. The benchmark MBA 30-year interest rate edged down to 5.49% from 5.53% last week but is still up by over 2 percent since the start of the year.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.