New residential construction in the U.S. unexpectedly saw a significant rebound in the month of April, according to a report released by the Commerce Department on Wednesday.<\/p>\n
The report said housing starts jumped by 2.2 percent to an annual rate of 1.401 million in April after plunging by 4.5 percent to a revised rate of 1.371 million in March.<\/p>\n
Economists had expected housing starts to drop to an annual rate of 1.405 million from the 1.420 million originally reported for the previous month.<\/p>\n
Single-family housing starts shot up by 1.6 percent to a rate of 846,000, while multi-family housing starts surged by 3.3 percent to a rate of 555,000.<\/p>\n
Meanwhile, the Commerce Department said building permits slumped by 1.5 percent to an annual rate of 1.416 million in April after tumbling by 3.0 percent to a revised rate of 1.437 million in March.<\/p>\n
Building permits, an indicator of future housing demand, were expected to climb to a rate of 1.430 million from the 1.413 million originally reported for the previous month.<\/p>\n
The continued decrease came as multi-family permits plunged by 7.7 percent to a rate of 561,000, more than offsetting a 3.1 percent spike in single-family permits to a rate of 855,000.<\/p>\n
“We look for housing starts to slow as the year progresses amid tighter lending standards and the emergence of a recession,” said Nancy Vanden Houten, U.S. Lead Economist at Oxford Economics.<\/p>\n
On Tuesday, the National Association of Home Builders released a separate report unexpectedly showing a continued improvement in homebuilder confidence in the month of May.<\/p>\n
The report said the NAHB\/Wells Fargo Housing Market Index jumped to 50 in May from 45 in April. Economists had expected the index to come in unchanged compared to the previous month.<\/p>\n
Homebuilder confidence improved for the fifth straight month, with the housing market index reaching its highest level since hitting 55 in July 2022. <\/p>\n