TRD Insights: Resi construction plunges in April

Unit authorizations dropped 21 percent from March

TRD New York TRD INSIGHTS /
May.May 21, 2020 10:30 AM
The coronavirus pandemic’s impact on the residential construction industry was initially blurry, largely because the data reflected only two weeks of its onset.

But now April’s residential new construction census figures are in. It’s not a pretty picture.

Seasonally adjusted authorizations of single- and multifamily units last month fell to 1,074,000, a 21 percent drop from their March level. Meanwhile, seasonally adjusted housing starts dropped to 891,000 units, down 31 percent from March. Looking back a year, both of these metrics dropped by at least 19 percent from their levels last April.

Broadly, single-family construction suffered more than multifamily. About 670,000 single-family units were authorized by building permits in April, down 24 percent from their March level of 884,000. Similarly, single-family housing starts dropped 25 percent to 650,000 from their March level of 871,000.

The results for multifamily construction were mixed. Multifamily units authorized by building permits dropped 12 percent to 373,000 from their March level of 426,000, while multifamily unit starts dropped 40 percent to 234,000 housing units from their March level of 392,000.

The comparatively muted decrease in unit authorizations for multifamily properties matches market sentiment on multifamily’s prospects long term. Some ratings houses expect multifamily real estate to weather the pandemic better than different kinds of real estate, while others warn of higher loan default risk for apartments with low-income and moderate-income tenants.

New construction in April dropped in all regions of the United States, but the biggest plunge was in the Northeast, where governors announced and extended bans on all nonessential construction. Homebuilder confidence in the Northeast single-family market in April approached record lows, according to the National Association of Homebuilders’ Housing Market Index.

Still, this month’s data is incomplete. Census statistics on the month-over-month change in housing completions had margins of error that included zero, which means it’s possible there was no change in the number of housing completions.


Related Articles

arrow_forward_ios
The process for challenging property assessments is so antiquated, officials won’t do Zoom meetings. (iStock)

“A recipe for disaster”: Fighting property taxes in a pandemic

“A recipe for disaster”: Fighting property taxes in a pandemic
Clockwise from left: Bronx housing court at 1118 Grand Concourse, Governor Andrew Cuomo, Judge Lawrence Marks, New York Supreme Court at 60 Centre Street (Getty; Google Maps; Wikipedia; New York State Courts)

Attorneys find ways to “eject” tenants without Housing Court

Attorneys find ways to “eject” tenants without Housing Court
Cadillac Fairview CEO John Sullivan and the RCB Centre in Toronto (Google)

This Canadian office giant has a strategy for a return to work

This Canadian office giant has a strategy for a return to work
Bars, restaurants and live entertainment venues around the world are now weighing their reopening options. Some owners say they can’t cover the cost of operating at reduced capacity. (Getty)

Facing the music: Entertainment venues, restaurants weigh reopening options

Facing the music: Entertainment venues, restaurants weigh reopening options
Anbang’s Andrew Miller, Mirae’s Peter Lee and (from left) JW Marriott Essex House, the Westin St. Francis in San Francisco and the Four Seasons in Jackson Hole (Credit: Marriott, Westin, Four Seasons)

Buyer’s remorse?: How Anbang’s $5.8B hotel deal went sideways

Buyer’s remorse?: How Anbang’s $5.8B hotel deal went sideways
Softbank's Marcelo Claure, Masayoshi Son and Rajeev Misra (Getty; iStock)

Internal feud at SoftBank casts doubt on Vision Fund

Internal feud at SoftBank casts doubt on Vision Fund
Commercial real estate property sales fell to their lowest level in a decade as a result of the economic slowdown caused by the coronavirus pandemic. (Pixabay)

TRD Insights: Commercial deal volume plummeted 71% in April

TRD Insights: Commercial deal volume plummeted 71% in April
Bed Bath & Beyond is planning to reopen 600 U.S. stores as states begin to wind down shelter-in-place orders. (Getty)

Bed Bath & Beyond to reopen 600 US stores

Bed Bath & Beyond to reopen 600 US stores
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...