Construction Numbers Highest Since 2007, Crushing Expectations

Residential construction numbers soared in April after a dismal March and both the number of residential permits issued and housing starts easily outpaced the expectations of analysts surveyed earlier by Reuters.  The numbers were especially strong in the Northeast region as its unusually harsh winter ended.  The construction data was provided in a joint release from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development

Permits for residential construction were issued at a seasonally adjusted annual rate of 1,143,000 units, an increase of 10.1 percent from the slightly downgraded (from 1,039,000 units) March estimate of 1,038,000 units.  Analysts had forecast permits at 1.06 million units.  The current estimate is an increase of 6.4 percent from the 1,074,000 units permitted in April 2014.

There were 666,000 permits issued for single family construction during the month, up 3.7 percent from March's 642,000 permits.  Construction was authorized for 444,000 units in buildings with five or more units compared to 370,000 units in March, an increase of 20.0 percent.

On a non-seasonally adjusted basis there were a total of 105,000 permits issued during the month compared to 91,300 in March.  Permits for single family construction rose from an estimated 57,500 in March to 64,000.

Housing starts nationally jumped by 20.2 percent from a month earlier to a seasonally adjusted annual rate of 1,135,000.  Analysts had expected a rate of 1.02 million.  The March estimate of housing starts was revised from 926,000 to 944,000.  On an annual basis starts were 9.2 percent higher than a year earlier when the estimate was 1,039,000 units.

Single-family construction was begun on an estimated 733,000 units, an increase of 16.7 percent from the revised (from 618,000) March estimate of 628,000.  Construction was begun on 389,000 units in multi-unit buildings, up from 295,000 in March.

The month-over-month improvement in starts was even more apparent after looking at non-seasonally adjusted numbers.  April starts were estimated at 103,600 compared to 78.800 in March.  Single family starts numbered 69,200, up from 53,200

Housing units were completed at a seasonally adjusted annual rate of 986,000, a 20.4 percent jump from the previous month's estimate of 819,000 (revised down from 823,000), and 19.4 percent more completions than in April 2014 when 826,000 units were completed.

Single family completions in April were at the rate of 688,000 units, a 14.5 percent increase from March and up 15.2 percent from a year earlier.  There were an estimated 288,000 multi-family units completed. 

On a non-seasonally adjusted basis completions nationwide were estimated at 76,100, 53,600 of which were single family units.

At the end of the reporting period there were an estimated 853,000 housing units under construction nationwide, 363,000 of them single-family homes.  There were 134,000 permits outstanding for which construction had not yet begun, including 62,000 single-family permits.

The surge in numbers in the Northeast covered all phases of construction. Permitting rose 38.8 percent over March and 57.0 percent compared to a year earlier.  Starts were up by 85.9 percent compared to March and 52.1 percent on an annual basis and completions increased by 73.3 percent and 42.5 percent respectively.

In the Midwest permits declined by 1.3 percent compared to March and 7.5 percent from a year earlier.  Housing starts however rose 27.8 percent month-over-month but remained 10.5 percent lower than in April 2014.  Completions were up 82.5 percent for the month and were 51.6 percent higher than a year earlier.

The South posted a 9.9 percent increase in permits from March and 1.3 percent from April 2014. Starts were down 1.8 percent for the month but 3.5 percent above those the prior year. Completions were up 2.2 percent from March and 7.4 percent year-over-year.

Permits were up 3.0 percent in the West compared to March and 3.4 percent higher than the previous April.  Starts jumped by 39.0 percent and 14.9 percent for the two earlier periods.  Completions were 13.9 percent higher than in March and 16.8 percent above the April 2014 level.