Key Highlights
- US Commerce Department and US Census Bureau report housing starts nosedived -30.2% in April, lowest level since early 2015
- Housing starts tumbled nearly -30% y/y while home building fell in all four regions of the country in April
Housing experts polled by Reuters expected housing starts to decrease -26% in April. Instead, housing starts dropped to a seasonally adjusted annual rate of 891,000 units or -30.2% in April reported the US Commerce Department and US Census Bureau. This drop of -30.2% in housing starts is the lowest level since early 2015. On a y/y basis, housing starts dropped -29.7% in April.
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Adding to this bad home building news is the fact that permits for future home construction also plunged in April by -20.8%.
Most economists predict the housing market downturn coupled with the flop of consumer spending, business investment and manufacturing could result in a tailspin of the gross domestic product (GDP) to as much as -40% in Q2 2020, the deepest tailspin since the 1930’s.
Single-family home building, the largest share of building in the housing market, decreased at a rate of -25.4% in April. Likewise, single-family building permits dropped -24.3%. Multi-family building starts nosedived -40.5% and permits dropped -14.2%.
Housing completions were less impacted by the pandemic. On a month-to month basis, completions were down -8,1% and -11.8% year-over-year.
If there is any good news here, it is that there are some indications that this slump in housing starts may be over. A recently released survey by the National Home Builders Association indicated an increase in homebuilder confidence in May.
Thanks to HousingWire, InmanNEWS, US Census Bureau and US Commerce Department.
Also read: Economy Shrinks -4.8% in Q1 – Likely Just “Tip of the Iceberg”, Prelude to 2020 – Home Prices Up As Well As New Home Sales in November, Will Housing Recession-Proof the Economy in 2020?
