Housing Starts: Sharp Declines As Shutdowns Spread Across Nation

May 19, 2020
Bottom Line: After a 20+% decline in housing starts in March, led by declines in the Northeast, starts fell sharply across the country in April. Down another 30%, multifamily starts were less than half their January peak while single-family starts were down about 40% from January. Starts in the Midwest and South were relatively more robust as shutdowns in many parts of these regions were less restrictive. Overall, despite the shock from the closures, the trends are have not turned all that much for housing. Multifamily starts are still only back to the range lows of the last five years. Singel-family starts, meanwhile, fell back to levels seen as recently as 2015. Construction has resumed in most parts of the country as of mid-May. Amid lower mortgage rates and a potential secular shift away from urban and multifamily housing back towards single-family homes, residential construction continues to look like one sector that could lead the economy out of the virus recession. Housing Starts FELL by 30.2% in April to 891k, compared with market expectations for a decline to 900k. Meanwhile, the prior month was revised moderately higher from 1,216k to 1,276k. Housing starts are now 29.7% BELOW their year-ago level. However, they are still a sharp 60.8% BELOW their January 2006 peak. Single-Family Housing Starts FELL by 25.4% to 650k. Single-family housing starts are 24.8% BELOW their year-ago level but still 64.3% BELOW their January 2006 peak. Multifamily Housing Starts FELL by 40.5% to 241k. Multifamily starts are now 40.2% BELOW their year-ago level.