U.S. housing starts increased 8.2% in April 2008 -- an upside surprise skewed by a 36% rise in multi-family unit construction. Housing starts totaled a 1.032 million annual rate in April 2008, the U.S. Commerce Department announced (pdf) Friday.Economists surveyed by Bloomberg News had expected housing starts to total a 940,000 annualized rate in April 2008.
Still, housing starts are down 31% in the past year and single-family starts are down 42%, the largest decline for single-family starts since 1992.
Meanwhile, building permits, a measure of future construction, increased 4.9% to a 978,000 annualized rate in April 2008; single-family permits increased 4% and multi-family permits climbed 6.8% during the month.
Buyers in 'wait-and-see mode'
Economist Glen Langan told BloggingStocks Friday many potential homebuyers remain in wait-and-see mode, as housing's doldrums persist. "Potential home owners are taking it one month at a time. If prices drop, they wait another month. As you know, many have been waiting for several months, given price trends in various regions of the country," Langan said. "Prices are still arcing downward and the housing start totals reflect that. Foreclosures are pushing down housing prices by adding to the glut of unsold homes on the market, and potential buyers are waiting."
Further, Langan said April 2008's jump in multi-family construction also is typical of a soft housing market. "When builders can't build and sell single-family homes they'll switch to rental construction and we're seeing this in the housing start data," Langan said. "The housing market is not recovering, not yet. We need to see an increase in both single-family home sales and single-family construction to talk about a recovery."
Langan added that he expects the nation's supply of unsold homes, currently about a 9.5- to 10-month supply at present sales rates, to level-off at about an 11-month supply by the late summer 2008, before inventories start to work-off. A healthy home sale market typically has a 3-4 month supply of homes on the market.
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Reader Comments (Page 1 of 1)
5-16-2008 @ 11:01AM
B. Harrison said...
One "solution" for the crisis in the incomplete condominium construction market is to convert the buildings to apartment units.
with the scarcity of affordable apartments, these condominium untis could be aparment buildings if the financial returns can be worked out.
Don't know if that is a viable option; but certainly worth an evaluation. With the projected banruptcy of so many of thee projects, the structured repricing after bankruptcy and auctioning of the buildings may make that viable.
Anyone havine any data on this?