New residential construction spending advanced a strong 2.8% on a seasonally adjusted (SA) basis after falling 0.8% in February. Single-family construction spending jumped 3.8% following a 1.3% drop in February. Multifamily construction spending was down 1.8% after advancing 1.7% in February. On a year-to-date basis, both single-family and multifamily construction spending were up from the same period last year, 8.4% and 8.1%, respectively.
The Census Bureau’s report on April housing starts provided good news for both single-family and multifamily housing. April single-family housing starts advanced 2.3% to 492,000 at a seasonally adjusted annual rate (SAAR). March single-family starts were revised up from 462,000 to 481,000, and January and February starts were revised up as well. This is the first reading where the effects of unseasonably warm winter weather in much of the country no longer appear to be distorting the numbers. It also is an indication of a slightly better tenor to the housing market. Single-family starts have been at or above 460,000 starting in November of last year, the highest they have been since April 2010.
Meanwhile, April single-family building permits at 475,000 were at their second highest level in two years. The three-month moving average for permits of 473,000 marked their highest level since May 2010.
Another positive indicator for the single-family housing market comes from the May NAHB/Wells Fargo Housing Market Index (HMI), which rebounded from April’s dismal reading of 24 to 29, just above February’s and March’s 28 and its highest level in five years. Further, all three underlying indexes that make up the HMI (indexes for current sales, current traffic, and expected sales) increased in April.