Housing Starts: Slower April After Record March

Bottom Line:  After hitting their fastest pace since 2006 in March, housing starts slowed in April, led by single-family starts amid lower affordability.  Looking through the volatility of the first four months of the year, the trend slowed slightly since mortgage rates started to move higher, dampening affordability amid continued higher prices.  Moreover, homebuilders' outlooks have been more uncertain given dramatically higher lumber prices and shortages of many raw materials due to supply chain disruptions.  That said, despite these potential headwinds, the overall level of housing activity remains historically strong. Housing should continue to add positively to US GDP, but these early 2nd Quarter figures suggest housing may become slightly less positive than it was in the 1st Quarter and late last year.Housing Starts FELL by 9.5% in April to 1569k, compared with market expectations for a decline to 1704k.   Meanwhile, the prior month was revised slightly lower from 1,739k to 1,733k.  Housing starts are now 67.3% ABOVE their year ago level.  However, they are still a sharp 31.0% BELOW their January 2006 peak.Single-Family Housing Starts FELL by 13.4% to 1087k. Single-family housing starts are 58.7% ABOVE their year-ago level but still 40.4% BELOW their January 2006 peak.Multifamily Housing Starts ROSE by 1.3% to 482k. Multifamily starts are now 90.5% ABOVE their year-ago level.