US housing starts beat forecasts in April, despite homebuilder skepticism
Residential construction activity in the States picked up more quickly than expected last month but remained below year-ago levels and there were signs of continued caution among homebuilders.
According to the Department of Commerce, US housing starts increased by 5.7% month-on-month in April to reach an annualised pace of 1.235m.
Economists had penciled-in a clip of 1.218m.
Even so, they remained 2.5% lower in comparison to their year-earlier level, Commerce said.
And March's estimate was marked up from a preliminary print of 1.139m to 1.168m.
Housing permits meanwhile edged up by 0.6% versus March to reach 1.296m (consensus: 1.295m), with the March print having also been revised higher, from 1.269m to 1.288m.
However, as Ian Shepherdson, chief economist at Pantheon Macroeconomics pointed out, permits for single-family homes in fact fell by 4.2% on the month, plumbing their lowest reading since November 2016, such that it was multi-family permits which accounted for the bulk of the increase.
"Their skepticism seems to be persisting; the increase in permits was all in the volatile multi-family sector [...] This can't last," Shepherdson said.
"If new home sales continue to run at their March level - that's our minimum expectation - single-family permits need to rise by about 20%. Homebuilders eventually will act; no one wants to lose share in a rising market, and we expect housing construction to make a small positive contribution to Q2 GDP growth."