About that Strong April Recovery: Housing Starts and Permits Flop, March Revised Lower

mishtalk.com / Mike “Mish” Shedlock / May 16, 2017

The much ballyhooed second quarter recovery is firing on about 1/2 cylinder out of 4.

April housing starts came in at 1.172 million Seasonally Adjusted Annualized (SAAR), were well under the Econoday consensus estimate of 1.256.

March was also revised lower from 1.215 million to 1.203 million.

A topping out from lower-than-indicated expansion highs is the news from the April housing starts report where levels, though still healthy, are disappointing. Starts fell 2.6 percent to a 1.172 million annualized rate that is well below Econoday’s low estimate for 1.215 million. Downward revisions are a factor in the report, totaling 27,000 in the prior two months.

The strength in the report is in the key single-family component with starts up 0.4 percent to a rate of 835,000. Otherwise, however, the report is filled with minus signs. Permits for single-family homes fell 4.5 percent to a 789,000 rate with completions also down 4.5 percent, to 784,000.

The sharpest weakness comes from multi-family homes where starts fell 9.2 percent to a 337,000 rate. Permits did rise 1.4 percent to 440,000 but completions dropped 17.2 percent to a 322,000 rate.

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