US housing starts drop in April, contrary to 'raging housing boom' narrative

US homebuilders broke ground on far fewer new homes than expected last month.

According to the Department of Commerce, housing starts fell at a month-on-month clip of 9.5% to reach an annualised pace of 1.569m (consensus: 1.705m).

Starts for single-family homes were weakest, plummeting by 13.4% against March to 1.09m.

Permits on the other hand, which are a lead indicator for starts, did edge up by 0.3% on the month to reach 1.76m (consensus: 1.77m).

"Stepping back from the noise, though, the trend in single-family starts now appears to be falling, tracking the drop in permits," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

"New home inventory is very low, but developers nonetheless respond to short-term shifts in demand and the picture now is clear. As the rest of the consumer-facing economy rebounds dramatically, the housing market - both sales volumes and construction activity - is set to struggle over the next few months. The media narrative of a raging housing boom is outdated."