Investing.com -- April housing starts and permits surpassed consensus expectations, according to data released by the Census Bureau on Monday, with multi-family activity driving the outperformance.

April starts reached 1.465 million on a seasonally adjusted annual rate basis, 4% above the 1.41 million consensus estimate. While starts declined 3% from March, the reading marked the second strongest in the past 12 months. Multi-family starts increased 20% year-over-year and 10% sequentially on a SAAR basis. Single-family starts fell 9% from March and declined 2% year-over-year.

Housing permits reached 1.442 million SAAR, exceeding the 1.38 million consensus and rising 6% from March. Single-family permits dropped 3% sequentially, while multi-family permits jumped 22% from the previous month.

On a non-seasonally adjusted basis, total housing starts of 133,000 increased 5% year-over-year. The West showed significant improvement with a 47% gain, while the Southeast, Midwest and Northeast all posted declines of 3%, 9% and 3% respectively.

April multi-family starts on an NSA basis grew 18% year-over-year and 20% year-to-date. The West recorded exceptional strength with a 170% year-over-year increase, marking the best individual month in approximately three years. Single-family starts totaled 86,000 NSA, down 2% year-over-year but representing the second highest reading in nine months.

April housing permits were 131,000 NSA, flat year-over-year. Single-family permits fell 6% year-over-year, marking the sixteenth consecutive annual decline. Multi-family permits increased 12% year-over-year.

Housing completions of 116,000 NSA declined 2% year-over-year. Single-family completions dropped 7% year-over-year, while multi-family completions rose 7% year-over-year, the first monthly gain in over a year.

Baird noted that sustainability remains uncertain with higher rates and inflation presenting risks into the second half of the year. The firm continues to favor residential stocks with secular growth prospects, market share gains and capital deployment opportunities. Baird identified GFF as its top residential pick, also highlighting JHX, SSD, TREX, 669-HK and TGLS.