US single-family housing starts tumble in April

WASHINGTON, May 21 (Reuters) - U.S. single-family ‌homebuilding dropped sharply ​in ​April and permits for future construction fell, suggesting the housing market could remain subdued for a while as the Iran war drives up ‌mortgage rates and an oversupply of new houses persists.

Single-family housing starts, ⁠which account for the bulk of homebuilding, tumbled 9.0% to a seasonally adjusted annual rate of ‌930,000 units, the Commerce Department's Census ‌Bureau said on Thursday. Single-family homebuilding fell in all four regions. It declined 2.4% year-on-year in April.

The U.S.-Israel war with Iran has raised oil prices and ​is fanning inflation, driving up U.S. Treasury yields. Mortgage rates track the 10-year Treasury note, whose yield is hovering near a 1-1/2 year high.

The popular ⁠30-year fixed mortgage rate averaged 6.36% last week, data from mortgage finance agency Freddie Mac showed. It averaged ​5.98% at the end of February, when the war started, as Freddie Mac and Fannie Mae expanded purchases of mortgage-backed securities.

Permits for ​future construction of single-family homes dropped 2.6% last ‌month to a rate of 872,000 units. They decreased 5.5% year-on-year in April.

Homebuilding is also being weighed down by tariffs on ⁠imported goods, including lumber and vanity cabinets, as well as higher land, labor and construction costs. Residential investment, which includes home building, has contracted for five straight quarters.

A National Association ⁠of Home Builders survey this week showed homebuilder sentiment remaining depressed in May.

Though new housing inventory ​has declined from levels last seen in late 2007, it remains elevated.

Starts for housing projects with 5 units or more, a very volatile segment, jumped 14.3% to a rate of 529,000 ‌units in April. Multi-family housing starts shot up 23.3% year-on-year. Overall housing starts fell 2.8% to a pace of 1.465 million ‌units. They increased 4.6% year-on-year in April.

Building permits for multi-family housing projects surged 22.7% to ⁠a rate of 514,000 units ‌in April. Overall building permits ​increased 5.8% to a rate of 1.442 million units last month. They fell 0.2% year-on-year in April.

(Reporting by Lucia Mutikani; Editing by ‌Chizu Nomiyama)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• July's Typhoon Maysak killed at least 159 in China's southwest region
• Samsung SDI says to sell $3.2 billion worth of Samsung Display shares back to display maker
• Prince Harry to learn how much failed Daily Mail lawsuit will cost