US housing starts jump in April amid lower mortgage rates

Building permits, an indicator for future new construction, also rose

May.May 16, 2019 04:30 PM
The United States housing market is up in April (Credit: iStock)

The United States housing market is up in April (Credit: iStock)

The U.S. housing market just received some much needed positive news.

Housing starts rose 5.7 percent in April, compared to March, to an adjusted annual rate of 1.24 million, according to data from the U.S. Census Bureau released on Thursday. This number includes both multifamily and single-family homes.

The news comes after numerous economic indicators have shown that the housing market is slowing down. Last month, single-family housing starts fell 0.4 percent to 781,000, the slowest pace since September 2016.

April’s numbers indicate that homebuilders could be back to constructing new homes due to lower mortgage rates. The 30-year fixed rate mortgage declined to 4.10 percent in April from a high of about 4.94 percent in November. Lower mortgage rates make home buying more affordable for buyers.

Building permits, an indicator for future new construction, also rose 0.6 percent to a seasonally adjusted rate of 1.3 million, the newly released data shows. But single-family housing permits fell, marking the fifth consecutive month of declines, suggesting there will be less new construction in coming months.

Affordability is one of the biggest challenges facing homebuilders. Buyers are unable to afford to buy homes in many metro areas such as Miami, New York and Los Angeles, while homebuilders are having a tougher time constructing less expensive homes due to rising labor and supply costs.

These pressures have caused many economists to wonder whether the post-recession housing boom is coming to an end. One indicator: the pace of home price growth of existing homes is slowing in many cities.

In Miami, about 88 percent of single-family homes were purchased after the seller lowered the price, according to the housing startup Knock. In Chicago, 82 percent of homes sold at a discount from the initial asking, while in New York, 77 percent of homes sold at a price reduction.

Related Articles

(Credit: iStock)

South Florida residential construction starts jump 72% in January

D.R. Horton CEO David Auld with a photo of a D.R. Horton multifamily home and rendering of the Arden planned community 

D.R. Horton to build homes in western Palm Beach County

Brent Baker and a Pulte single-family home

PulteGroup nabs 20 acres in Lauderdale Lakes for new home community

Centerline Capital Advisors President Craig Perry and 17101 Southwest 200th Street (Credit: Google Maps)

Centerline snags 90-acre dev site in south Miami-Dade

A rendering of Via Ventura and Stuart Miller (Credit: Lennar)

Lennar sells off part of its Via Ventura community

From left: Andrea and Renzo Rosso

Diesel family dishes on Wynwood condo project

4001 Seminole Pratt Whitney (Credit: iStock)

Minto sells 35 acres of Westlake project

Arden home community and Stuart Miller

Lennar picks up 50 lots in western Palm Beach County