New home starts rose slightly in April, a sign that demand is growing for newly built homes in a low-inventory market.
- Home starts rose 2.2% in April, but were still down 22.3% from a year ago.
- Newly constructed single-family homes rose 1.6% in April.
- A strong uptick in starts from the West offset regional declines elsewhere.
At 1.401 million private housing starts, all housing starts in April were up 2.2% from March, but still down 22.3% from April 2022.
New single-family home starts totaled 846,000 in April, an increase of 1.6% from the previous month. Meanwhile, privately owned building starts of five or more units rose 5.2% in April to 542,000 units, albeit down 11.7% year over year.
Housing construction, which has been authorized but not yet started, also increased in April. Single-family units that were permitted but not yet started increased 4.5% in April from the previous month, but were still down 7.9% from a year ago.
Between 2012 and 2022, the U.S. needed about 6.5 million single-family homes, a recent Realtor.com analysis found. The rate of household formation is quickly outpacing the number of newly constructed single-family homes on the market, making it difficult for potential home buyers looking to buy.
With home prices elevated, mortgage rates high and inventory low, buyers are turning to newly constructed homes. The uptick in new home construction also matched an increase in the National Association of Home Builders’ builder confidence data, which reflects builders’ sentiment on new home sales, released yesterday.
However, the strength in housing starts is not universal. Strong gains in some regions helped offset big losses in other areas of the country. Single-family home starts in the Northeast fell 10.3 percent in April, while in the South they fell 6.1 percent. In the Midwest, new construction single-family homes were down 20.5% during the month. The West was the only region to post monthly gains in new single-family home construction with a 59.5% increase.