US housing starts, building permits fall sharply

WASHINGTON: US homebuilding tumbled in April and permits fell, suggesting the housing market continued to tread water amid shortages of land and skilled labor. Housing starts dropped 3.7 percent to a seasonally adjusted annual rate of 1.287 million units in April, the Commerce Department said yesterday. The decline reversed March’s rise.

Data for March was revised to show starts rising to a 1.336 million-unit rate instead of the previously reported 1.319 million-unit pace. Building permits fell 1.8 percent to a rate of 1.352 million units last month. Economists polled by Reuters had forecast housing starts decreasing to a pace of 1.310 million units last month and permits declining to a 1.350 million-unit rate. Starts fell in the Northeast, West and Midwest, but rose in the South. US financial markets were little moved by the data. Single-family homebuilding, which accounts for the largest share of the housing market, edged up 0.1 percent to a rate of 894,000 units last month. Single-family homebuilding has lost momentum since setting a 948,000-unit pace last November, which was the strongest in more than 10 years.

Last month’s gain in single-family starts was outpaced by an 11.3 percent decline in groundbreaking activity on multi-family housing units. Residential construction has been hamstrung by rising prices for building materials and shortages of land and skilled workers. While a survey on Tuesday showed confidence among single-family homebuilders perked up in May, builders complained that “the record-high cost of lumber is hurting builders’ bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market.”