US housing starts increased in April as a pickup in multifamily home construction more than offset a decline in single-family dwellings caused by elevated inventory.
New residential construction increased 1.6% to an annualized rate of 1.36 million homes, according to government data released Friday. That was in line with the median estimate in a Bloomberg survey of economists.
The advance was driven by a 10.7% jump in construction of multifamily housing such as apartment buildings. Starts of single-family homes decreased 2.1% to the slowest pace since July, due to a slump in the West region.
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Building permits for single-family homes decreased 5.1% to an almost two-year low, suggesting new construction will soften in coming months.
The starts and permits figures on single-family homes illustrate a housing industry that is struggling to gain traction as mortgage rates near 7% limit demand. Meanwhile, confidence among homebuilders stands at the lowest level since late 2023, with firms expecting tariffs to boost costs at the same time home prices are near record highs.
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With the supply of new homes at a 17-year peak, builders have little incentive to ramp up production. The number of single-family homes under construction eased for a second month in April to a four-year low.
Some public homebuilders are
Before the starts report, the Federal Reserve Bank of Atlanta's
The April drop in starts of single-family was entirely due to an 18.7% slump in the West region, the largest decline since August 2023. While new construction of one-family homes rose in the other three regions to a pace that marks a general slowdown from activity last year.
The number of houses completed in April dropped nearly 6% to the slowest pace since October 2023.
The new residential construction data are volatile, and the government report showed 90% confidence that the monthly change ranged from a 10.2% decline to a 13.4% gain.
