US housing starts jump in April amid lower mortgage rates

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

National /
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

arrow_forward_ios
AIMCO founder Terry Considine and a rendering of the Grand Flamingo tower
Miami Beach board rejects Aimco’s proposal for Grand Flamingo tower
Miami Beach board rejects Aimco’s proposal for Grand Flamingo tower
Stuart Miller, Executive Chairman of Lennar (Getty, University of Miami)
Lennar picks up 27 acres in Homestead for $7M
Lennar picks up 27 acres in Homestead for $7M
Toll Brothers chairman and CEO Douglas C. Yearley, Jr. with Jupiter Country Club (Toll, Facebook via Jupiter Country Club)
Toll Brothers faces lawsuits over alleged construction defects at Jupiter Country Club
Toll Brothers faces lawsuits over alleged construction defects at Jupiter Country Club
Aventura Mayor Enid Weisman (Facebook via Weisman, Getty)
Aventura votes to require HOAs to submit critical reports within 48 hours
Aventura votes to require HOAs to submit critical reports within 48 hours
The current Miami Beach North Shore library with Mayor Dan Gelber (Google Maps, Gelber)
Miami Beach seeks buyers for city-owned development sites
Miami Beach seeks buyers for city-owned development sites
The partially collapsed 12-story Champlain Towers South condo building (Getty)
Inside the tug-of-war over the Surfside condo site’s future
Inside the tug-of-war over the Surfside condo site’s future
 Adam Neumann (Getty, Bal Harbour Florida)
Ex-WeWork CEO Adam Neumann inks $44M deal for Bal Harbour properties
Ex-WeWork CEO Adam Neumann inks $44M deal for Bal Harbour properties
Alex Sapir and Giovanni Fasciano with Arte by Antonio Citterio in Surfside (Photos via Arte by Antonio Citterio/PR Newswire)
Miami penthouse sets cryptocurrency sale record: $22.5M
Miami penthouse sets cryptocurrency sale record: $22.5M
arrow_forward_ios

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

Loading...