WASHINGTON — Housing starts declined 6.8 percent in April to a seasonally adjusted annual rate of 1.63 million units, the U.S. Department of Commerce reported, due primarily to a substantial dip in multifamily production. However, permit issuance and backlogs of unused permits were up in April for both single-family and multifamily dwellings, boding well for an increase in housing starts in May, according to the National Association of Home Builders (NAHB).

The report “is generally positive in that it shows gains in single-family housing production in three out of four regions, and especially because it indicates a very healthy level of housing permits and a growing inventory of unused permits that should translate to increased housing activity in the coming months," said Kent Conine, president of the NAHB.

Nationwide, single-family housing starts fell 3 percent in April to a seasonally adjusted annual rate of 1.36 million units. Unusually wet weather in parts of the South apparently contributed to this decline, evidenced by the fact that single-family starts fell in that region at the same time that single-family permits rose and the backlog of unused permits for single-family dwellings expanded almost 9 percent.

Multifamily housing starts, which typically show significant volatility from month to month, declined 22 percent on a national basis in April to a 274,000-unit rate.

Regionally, the South — which is the nation's largest housing market — registered an 11 percent dip in overall housing production in April, compared to smaller declines of 7 percent in the Midwest, 1.3 percent in the Northeast, and less than 1 percent in the West.

Building permits, which can be an indicator of future building activity, rose across the board in April. Overall permits were up 1.2 percent to a 1.71 million unit rate, while single-family permits rose by an equal margin to a rate of 1.33 million units — on par with their 2002 total. Multifamily permits rose 1.1 percent to 381,000 units in the month.

All regions registered gains in April housing permits except the South, where overall permitting activity was almost unchanged from the previous month (despite the gain on the single-family side). The Midwest led the pack with a 5.6 percent increase, followed by the Northeast's 2 percent gain, and the West's 1 percent uptick.

"Housing is still on track for a very solid year overall, with total production expected to nearly equal last year's number," said NAHB’s chief economist David Seiders.

Publication date: 05/19/2003