Surprise fall in US housing starts and permits for April
(ShareCast News) - US housing starts fell unexpectedly at the start of the year, possibly due to the shift in the timing of Easter and the passing of unusually warm fall and winter weather.
Yet economists appeared to be optimistic that an improvement was on the cards in the months ahead.
Housing starts in the States declined by 2.6% month-on-month in April to reach an annualised pace of 1.172m, according to the Department of Commerce.
Analysts had forecast 1.260m.
To take note of, single-family starts were up by 0.4% to 835,000, a positive sign, while those for multi-family homes were running at 328,000, a 9.6% fall versus March.
Total housing started increased by 5.7% year-on-year.
Permits for housing construction shrank by 2.5% on the month to reach 1.229m, putting them 5.7% ahead of their year-ago level.
Single family home permits fell 4.5% on the month to 789,000, versus a rise of 1.5% in those for multi-family homes to 403,000.
Ian Shepherdson, chief US economist at Pantheon Macroeconomics, emphasised to clients how Tuesday's weaker than expected data was at odds with an apparent increased demand for mortgages bullish sentiment among homebuilders.
"It's possible that the long run of relatively warm late fall/winter weather boosted activity temporarily, and the trend is now mean-reverting, but we can't know for sure. The late Easter might have hit the April numbers too. At this point, then, we think it would be very premature to assume that the weakness in the latest data will persist. We expect a clear rebound over the next few months."