So-called housing starts rose 5.7% in April from the prior month to a seasonally adjusted annual rate of 1.235 million, the Commerce Department said Thursday. Residential building permits, which can signal how much construction is in the pipeline, climbed 0.6% from March to an annual pace of 1.296 million in April, the first monthly increase since December.
Economists polled by The Wall Street Journal had expected a 5.4% gain for starts and a 1.7% increase for permits last month.
Building projects for homes made for one family rose in each region of the U.S. but the South. Meanwhile, building in the Northeast increased at the fastest pace in nearly two years.
Overall construction rose for single-family homes and apartment properties. Permits for single-family homes, however, declined. Building project approvals rose for apartment building. Building projects for single families have held near the highest levels since before the most recent recession, while multifamily construction eased because of a glut of apartment properties in some parts of the country.
Housing-starts data are volatile from month to month and can be subject to large revisions. April’s 5.7% rise for starts came with a margin of error of 13 percentage points. Still, home construction has been cooling more broadly. Starts were down 7.2% in the first four months of 2019 compared with the same period a year earlier.
The U.S. economy should be poised to spur strong consumer demand for housing. Employers continue to churn out jobs at a time when the unemployment rate is hovering near historic lows. This has spurred some of the fastest wage growth in recent years and is buoying solid consumer confidence.
But a host of factors, including a lack of available land and rising input costs have driven up prices, causing a slowdown in the broader housing market.
Still, interest rates have pulled back recently while new-home price growth has decelerated, a potential bright spot for the market.