U.S. housing starts fell in April as single-family home construction fell the most in nearly a year. This indicates that builders are becoming more cautious as mortgage rates rise.
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New housing construction fell by 2.8% last month to an annual figure of 1.47 million homes, according to government figures released on Thursday.
The number of single-family home starts fell 9%, the highest since August, to a pace of 930,000 annually. However, the number of new multi-family housing units has increased by more than 10% to the highest level since May 2023.
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The report also shows that permits for single-family homes, a key indicator of future construction, fell 2.6% to the lowest level since August.
The numbers suggest homebuilders remain focused on completing a still-increased inventory of new properties. Although sales have increased in recent months, most homes were already under construction or completed.
Numerous challenges remain to a sustainable homebuilding rebound, including rising mortgage rates, declining consumer confidence and tight household budgets.
Separate figures on Thursday showed there was little change in initial jobless claims last week, indicating layoffs remain moderate overall.
New construction production fell in the South but rose in the other three US regions due to the increase in multifamily projects. The number of single-family homes fell in four regions.
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New home construction data is volatile and the government report found that 90% believed the monthly change ranged from a decline of 13.8% to a gain of 8.2%.
Meanwhile, the National Association of Realtors reported Tuesday that pending sales of previously owned U.S. homes rose for the third straight month in April.