US housing starts register slight rise in April, permits dip

Homebuilding activity in the States rose a bit last month, but from a lower than expected base.

According to the US Department of Commerce, housing start increased by 2.2% month-on-month pace to reach an annual pace of 1.401m.

Economists had forecast a dip to 1.396m.

Part of the reason for that discrepancy was that the annual rate of housing starts for March was revised down from 1.42m to 1.371m.

Permits meanwhile slipped by 1.5% on the month to 1.416m.

Permits meanwhile slipped by 1.5% on the month to 1.416m (consensus: 1.437m).

However, as Kieran Clancy at Pantheon Macroeconomics pointed out, weakness in starts centred on the multi-family segment, where permits slumped by 7.7% over the month.

Permits for single-family homes on the other hand rose by 3.1%, for a third consecutive monthly increase.

"The bigger picture here is that residential construction is now stabilizing, after being a huge drag on fixed investment in 2022,3 he said.

"That said, any rebound in residential fixed investment will be swamped by a plunge in business capital spending; we expect total real fixed investment to fall by 4% and 3% in Q2 and Q3, respectively."