Housing completions have peaked this cycle.
The New Residential Construction Report for April shows a small uptick in housing starts but weakness in permits and completions.
Building Permits
- Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,412,000. This is 4.7 percent below the revised March rate of 1,481,000 and is 3.2 percent below the April 2024 rate of 1,459,000.
- Single-family authorizations in April were at a rate of 922,000; this is 5.1 percent below the revised March figure of 972,000. Authorizations of units in buildings with five units or more were at a rate of 431,000 in April.
Housing Starts
- Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,361,000. This is 1.6 percent (±11.8 percent) above the revised March estimate of 1,339,000, but is 1.7 percent (±9.2 percent) below the April 2024 rate of 1,385,000.
- Single-family housing starts in April were at a rate of 927,000; this is 2.1 percent (±12.1 percent) below the revised March figure of 947,000. The April rate for units in buildings with five units or more was 420,000.
Housing Completions
- Privately-owned housing completions in April were at a seasonally adjusted annual rate of 1,458,000. This is 5.9 percent (±10.3 percent) below the revised March estimate of 1,549,000 and is 12.3 percent (±10.5 percent) below the April 2024 rate of 1,662,000.
- Single-family housing completions in April were at a rate of 943,000; this is 8.0 percent (±10.8 percent) below the revised March rate of 1,025,000. The April rate for units in buildings with five units or more was 507,000.
Housing Starts 1959-Present
Housing starts peaked this cycle at 1.82 million in April of 2022.
Starts are down 25.2 percent from that peak. The complete stop to immigration suggests this decline will accelerate.
Housing Starts Single Family vs Multi-Family
There has been a small uptrend for the last year in multi-family constriction, but the primary trend peaked in November of 2022.
The fundamentals point lower, especially multi-family units. Look no further than a complete halt to immigration for weakening need for more housing.
Understanding Current Forces
- Immigration drove a huge need for multi-family but Trump put a screeching halt to immigration needs.
- The supply of housing from retiring and dying boomers will accelerate.
- Millennials and Zoomers are having fewer kids. Affordability is a huge issue.
- Mortgage rates are still near 7.0 percent
- Tariffs on steel, aluminum, lumber, and appliances add to building costs. Tariff uncertainty adds to job loss fears.
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