April US housing starts grow by 5.7% to 1.235 million units
New US homebuilding increased in April after a lackluster winter.
US housing starts in April jumped by 5.7%, according to the US Commerce Department. Home construction rose and 1.235 million units were built after a two-month decline in winter.
April US housing starts: key figures
| Single-family housing | 854,000 |
| Multi-family housing | 359,000 |
| Building permits | 1.296 million |
Why did US housing starts improve?
New US homebuilding increased because of high employment figures and low mortgage rates. Single-family housing surged by 6.2% to 854,000 units. Multi-family housing grew slightly by 2.3% to 359,000. In April, building permits also increased 0.6% to 1.296 million.
Matthew Speakman, economic analyst with real estate website, Zillow, observed that new homebuilding grew in April after the end of the US government shutdown this past winter and before the US-China trade dispute picked up.
‘Builders spotted a clear runway in April, coming on the heels of a March rebound in new home sales and amid low mortgage rates and a robust labour market,' said Speakman.
He also said that the April housing starts didn't have 'the barriers presented by this winter's partial government shutdown and early signs of a trade war with China.'
What’s next for the US housing market?
Andres Carbacho-Burgos, senior economist at Moody’s, believes that more multi-family homes will be built over the summer. He also believes that the construction of multi-family homes will continue to outpace single-family homes.
‘It looks like residential construction will move sideways in coming months, with a slight increase in multi-family construction edging out a decrease in single-family starts,’ said Carbacho-Burgos.
Ian Shepherdson, chief economist at Pantheon Microeconomics, says that if housing starts continue to grow, the positive figures could help the US gross domestic product (GDP).
‘We expect housing construction to make a small positive contribution to Q2 GDP growth,’ said Shepherdson.
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