U.S. housing starts dropped 30.2 percent sequentially in April, while March data were revised to a slightly smaller decline of 18.6 percent. In the last three months, starts have reversed most of the rebound of the recent recovery and has come to the levels last seen during 2013-2015, when the housing market was beginning to recover from the global financial crisis.
Single-family starts dropped 25.5 percent sequentially and starts of multi-family structures dropped 40.5 percent, after already falling at a double-digit rate in the prior two months. The three-month moving average of overall starts came in at 1.245 million, although this is likely to deteriorate further as the second quarter progresses, noted Barclays in a research report. The steep fall in March and the even larger fall in April make for some considerable negative base effects for housing starts and residential construction in the second quarter.
The softness in building permits implies that construction in on its way for some challenging months ahead. Building permits dropped 20.8 percent sequentially. Unlike with starts data, here the softness was focused on the single-family sector, which dropped 24.3 percent sequentially, while multi-family permits dropped 14.2 percent after having risen in March.
