New Housing Construction, Building Permits Point in Opposite Directions in April

The seasonally adjusted rate of new building permits rose to nearly 1.02 million, which is 14.3% above the downwardly revised March rate of 890,000 and 35.8% higher than the April 2012 rate of 749,000.

Single-family housing starts fell to an annualized rate of 610,000 in April, down 2.1% from the upwardly revised March rate of 623,000.

Permits for new single-family homes rose 3% in April, to an adjusted annual rate of 617,000, from an upwardly revised total of 599,000 in March.

The sharp decline in new housing starts is virtually entirely due to a 37.8% drop in new construction of apartment buildings with five or more units. Single-family housing starts in April fell just 2.1%. Year-to-date, single-family starts are up 26.9% and apartment building starts are up 33.9% compared with the first four months of 2012.

The National Association of Homebuilders (NAHB) yesterday reported a three-point rise in builder confidence, noting that buyers are faced with a drop in housing inventory levels. That fact partly explains the sharp rise in new building permits. The actual building is being throttled somewhat by supply chain problems that resulted from the housing crisis.