Starts of new U.S. homes fell more than forecast in April to a five-month low, indicating a pause in the industry’s progress as builders slowed work on apartments. Building permits surged to an almost five-year high.
Housing starts slumped 16.5 percent, the most since February 2011, to an 853,000 annualized rate after a revised 1.02 million pace in March, the Commerce Department reported today in Washington. The median estimate of 81 economists surveyed by Bloomberg was for a 970,000 rate.
Building applications that are higher than the level of starts signal residential construction will rebound as near record-low mortgage rates and improving job opportunities draw buyers. A limited supply of land is a hurdle for housing even as recent strength in real estate extends beyond builders to boost lenders and suppliers of construction materials.
“The housing sector has had a bit of a pause recently but the permits data suggests the momentum will resume,” said David Sloan, a senior economist at 4Cast Inc. in New York and the top forecaster for housing starts in the past two years, according to data compiled by Bloomberg. “Starts are very weak and permits are very strong. It seems to have been exaggerated by the volatile multifamily sector.”
Another report today showed jobless claims jumped to the highest level since the end of March. Stock-index futures fell after the reports, with the contract on the Standard & Poor’s 500 Index expiring in June falling 0.1 percent to 1,652.8 at 8:47 a.m. in New York.
Estimates in the Bloomberg survey ranged from an 873,000 pace to a 1.05 million rate after an initially reported 1.04 million in March.