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.
