Economic Update: Housing Starts

Housing starts dropped 10.6% in April, to an annual rate of 523,000 from an upwardly revised 585,000 in March. The consensus was for 570,000 starts.  Starts are down 12.8% from April 2010, when the tax rebate program was in full swing. Single-family starts dropped 5.1% to 394,000, while multi-family plunged 28.3% to 114,000. Starts rose in the Midwest and West, but fell in the Northeast and the South. Weather may have been a factor in the 23.0% decline in the southern states. Permits, which are less affected by weather than starts, fell 4.0% to 551,000. Although the report is weaker than expected, the drop is somewhat offset by the upward revision to March starts, from the 549,000 reported a month ago. Still, the decline shows that the housing market remains very weak.

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