A 2.6 percent decline in housing starts was recorded for the month of April according to a data by the US Department of Housing and Urban Developmentand the Commerce Department. The fall is attributed to the decrease in the number of multifamily homes constructed for the month stated.
All the major new construction indicators including permits, starts, and completions fell compared to last month. This will likely not do any good to the inflating home pricesbrought about by the continuous tightening of home inventory and the influx of demand.
The nationwide decline fell by 9.2 percent to a seasonally adjusted annual rate of 337,000 units for multifamily properties while construction of single-family housing units remained the same, climbing a mere 0.4 percent to 835,000 units.
This could cause an increase in rent prices across the country.
Another indicator of housing inventory health, issuances of building permits, also took a downfall. It decreased by 2.5 percent over the month. Meanwhile, home completions also fell by 8.6 percent from March. The two categories, however, were up from the numbers last year.
A silver lining
Despite this, however, some experts are still optimistic about the future of housing. The current report is said to be still within the forecast range for the strengthening of the single-family sector for 2017.
The combined production of single and multifamily homes in the regional level rose by 19.4 percent in the Midwest and 9.1 percent in the West, respectively. Multifamily permits also inched up by 1.4 percent to 440,000 units. Overall permits regionally increased by 8.7 percent in the West while it inched up by 1.0 percent in the Midwest.
For now, interest rates continue to hold at 4 percent, while new homes for sale continue to remain below the long-term trend. Meanwhile, March recorded the second-fastest pace in home sales in 9 years, a fact that drives many experts to believe housing starts will expand in 2017.