As housing starts fell 10.6% in April to a seasonally adjusted annual rate of 523,000 units, the National Association of Home Builders said the numbers point to a lack of confidence in the housing market.
“While mortgage rates are low and house prices are as affordable as they’ve been in a generation, the decline in April’s housing starts is indicative of the low level of confidence that consumers have in the housing market,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev.
Concerns regarding competition from foreclosures, a lack of consumer confidence in the housing market and the inability to secure production credit caused builders to slow production, the NAHB said.
“Consumers have not yet reached a level of confidence that is strong enough to begin lifting the housing market,” said NAHB chief economist David Crowe. “The fundamentals -- such as economic growth and employment -- are beginning to shape up and will eventually provide enough momentum to push housing forward at a healthy pace. But until then, builders are unwilling to move forward. The issuance of housing permits, an indication of future housing activity, has remained at about the same level as the first quarter of the year.”
Single-family starts declined 5.1% to a seasonally adjusted annual rate of 394,000 units in April, while multi-family starts -- which tend to display greater volatility on a month-to-month basis -- dropped 24.1% to a rate of 129,000 units after rising 30.8% the month before.