Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Housing Starts Declined 2.6% in April
Posted Under: Data Watch • Home Starts • Housing
Supporting Image for Blog Post

 

Implications:  Housing starts came in much lower than the consensus expected in April, falling 2.6% to a 1.17 million annual rate.  Starts were below even the lowest forecast from any economics group.  However, this does not signal the end of the housing recovery; far from it.  Multi-unit starts, which are extremely volatile from month to month, were entirely responsible for the April decline.  Meanwhile, single family-starts rose 0.4% and are now up 8.9% in the past year.  The "mix" of construction has been generally shifting toward single-family building and this is a good sign for the overall economy.  When the housing recovery started, multi-family construction led the way. But the share of all housing starts that are multi-family appears to have peaked in 2015, when 35.7% of all starts were multi-family, the largest since the mid-1980s, when the last wave of Baby Boomers was growing up and moving to cities. In April, the multi-family share of starts fell to 28.8%.  The shift toward single-family is a positive sign for the economy because, on average, each single-family home contributes to GDP about twice the amount of a multi-family unit.  Based on population growth and "scrappage," housing starts should eventually rise to about 1.5 million units per year, so much of the recovery in home building is still ahead of us.  The worst news in today's report was that single-family permits fell 4.5% in April.  But they are still up 6.2% in the past year, so don't expect the drop in single-family permits in April to lead to a decline in the future pace of home building.  In other recent housing news, the NAHB index, which measures sentiment among home builders, rose to 70 in May from 68 in April.  Expect further strength in the housing sector in the year ahead as more jobs, faster wage growth, and, for at least the time being, optimism about more market-friendly policies from a Trump Administration, continue to encourage both prospective home buyers and builders.    

Click here for PDF version       

Posted on Tuesday, May 16, 2017 @ 10:50 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.