Housing starts grow solidly in April, led by a surge in single-family units. Despite monthly volatility, the 12-month rolling total of starts remains strong in the West and South but flat in the Northeast and Midwest.
New housing starts grew at an impressive pace in April. The 12-month rolling total of starts-which is a less volatile measure-grew 11.6% year-over-year in April to 1,148,000 starts, slightly up from March. This represents the second most starts in a 12-month period since August 2007, but is lower than March 2016. Though the continued upward trend is good news for the housing sector, the 12-month rolling total is still 20.7% below a 50-year average of 1,443,559 starts.
Starts of single-family units have also shown strong growth over the past year, increasing 13.1% from a 12-month rolling total of 662,600 in April 2015 to 749,600 in April 2016. The share of multifamily starts in 5+ unit buildings continues to drop from a 42-year high last year, although they grew 10.1% year-over-year. This downward trend of new starts in multifamily units – which tend to primarily consist of renter-occupied units – is a result of the recent surge in single-family starts rather than a drop in investment by multifamily builders. We expect the rise in the share of single-family starts to continue to into the remainder of the year as single-family builders play catch-up.
Finally, regional housing starts continue to show disparities. The South leads the country with a 12-month rolling total of 578,800 new starts, which is the best 12-month span since May 2008. The 12-month rolling total for the Midwest in April was 160,500 units. The Northeast led the country in year-over-year growth, increasing by 27.3% and growing from a 12-month rolling total of 110,400 new starts in April 2015 to 140,600 in April 2016. New starts in the West remain solid, with a 12-month total of 264,700 and year-over-year growth of 17.4%. However, the Northeast and West showed month-over-month drops of 3.5% and 2.5%, respectively.
Housing Starts Summary:
- The 12-month rolling total of new housing starts in April were up 11.6% year-over-year;
- The 12-month rolling total of new housing starts in single-family units in March was up 13.1% year-over-year;
- The Northeast and South lead the charge in year-over-year growth.