Housing starts fell in April
Construction of new homes in the U.S. decreased in April
for the second straight month, driven by a decline in
single-family units, data from the U.S. Commerce
Department showed. Housing starts slipped 0.2% to a rate
of 1.724 million units last month. Single-family housing
starts, which account for the biggest share of
homebuilding, plunged 7.3% to a rate of 1.100 million
units, the lowest level since last October.
Permits for future U.S. homebuilding tumbled to a fivemonth
low in April, suggesting the housing market was
slowing as rising mortgage rates contribute to reduced
affordability for entry-level and first-time buyers.
Building permits dropped 3.2% to a seasonally adjusted
annual rate of 1.819 million units in April, the lowest level
since last November.
The decline was concentrated in the single-family housing
segment, where permits plunged 4.6% to a rate of 1.110
million units, also the lowest level since last October. But
the report from the Commerce Department also showed a
record backlog of houses still to be constructed.
"Housing construction appears to be undergoing a
transition, with the sector caught between sharply rising
mortgage rates and declining affordability on the one hand
and supply-chain constraints on the other that continue to
result in rising backlogs of projects," said Conrad
DeQuadros, senior economic advisor at Brean Capital in
In Canada, the annual pace of new home construction in
April rose 8% compared with March, according to the
Canada Mortgage and Housing Corporation. The housing
agency says the seasonally adjusted annual rate of housing
starts in April was 267,330 units, up from 248,389 in
Existing home sales fell in April to the lowest level
since the start of the pandemic
Existing-home sales recorded a third straight month of
declines, slipping slightly in April, according to the
National Association of Realtors. Sales declined 2.4%
compared with March to a seasonally adjusted annualized
rate of 5.61 million units. Sales were 5.9% lower than in
April 2021. That is the slowest rate since June 2020,
which was artificially slow since the economy was
struggling with sweeping shutdowns due to the
"We are moving back to pre-pandemic sales activity, but I
expect further declines," said Lawrence Yun, chief
economist for NAR, citing rising interest rates.
Existing-home sales in the Northeast rose 1.5% in April,
reaching an annual rate of 670,000, a 10.7% drop from
April 2021. The median price in the Northeast was up
8.1% from one year ago.
Existing-home sales in the Midwest grew 3.1% from the
prior month to an annual rate of 1,310,000 in April, a 1.5%
slide from April 2021. The median price in the Midwest
was 8.7% higher than one year ago.
Existing-home sales in the South fell 4.6% in April,
posting an annual rate of 2,490,000, which represents a
decrease of 5.7% from one year ago. The median price in
the South was up 22.2% climb from one year prior. For the
eighth consecutive month, the South recorded the highest
pace of price appreciation in comparison to the other three
Existing-home sales in the West dipped 5.8% compared to
the previous month, registering an annual rate of
1,140,000 in April, down 8.1% from one year ago. The
median price in the West was up 4.3% from April 2021.
Softwood lumber prices fell to a new 2022 low on the
news. Lumber futures fell as much as 6% to below $700
per thousand board feet, its lowest level since November
according to data from Finviz.
Job recovery continues
America's employers added 428,000 jobs in April
extending a streak of solid hiring that has defied punishing
inflation, chronic supply shortages, the Russian war
against Ukraine and much higher borrowing costs.
The jobs report from the U.S. Labor Department showed
that last month's hiring kept the unemployment rate at
3.6%, just above the lowest level in a half-century. The
economy's hiring gains have been strikingly consistent in
the face of the worst inflation in four decades. Employers
have added at least 400,000 jobs for 12 straight months.
Manufacturing added 55,000 jobs in April, while
construction companies, which have been slowed by
shortages of labor and supplies, added just 2,000. The
Labor Department provided further evidence that the job
market is still booming. It reported that only 1.38 million
Americans were collecting traditional unemployment
benefits, the fewest since 1970.
However, the latest employment figures contained a few
cautionary notes about the job market. The government
revised down its estimate of job gains for February and
March by a combined 39,000. And the number of people
in the labor force declined in April by 363,000, the first
drop since September.
Consumer sentiment approaches 11-year low
U.S. consumer sentiment slumped to its lowest level in
nearly 11 years in early May as worries about inflation
persisted, but household spending remains underpinned by
a strong labor market and massive savings, which should
keep the economy expanding.
The University of Michigan's survey on Friday showed the
deterioration in sentiment¡ªwhich some economists said
pushed it into recessionary territory¡ªwas across all
demographics, as well as geographical and political
affiliation. Gasoline prices and the stock market have a
heavy weighting in the survey.
The University of Michigan's preliminary consumer
sentiment index tumbled 9.4% to 59.1 early this month,
the lowest reading since August 2011. Consumers viewed
buying conditions for long-lasting manufactured goods as
the worst since the survey started tracking the series in
Manufacturing index hits 20-month low as
The U.S. manufacturing sector is still bustling, but it¡¯s
beginning to lose momentum. The Institute for Supply
Management (ISM) Manufacturing PMI index ¡ª a closely
watched gauge of the health of manufacturers ¡ª hit a 20-
month low in April.
At 55.4%, the figure was lower than March¡¯s 57.1% and is
the lowest since it was 55.4% in August 2020. Any
percentage over 50% denotes growth.
ISM's Timothy Fiore said in a statement that consumer
demand remains strong but that there are signs of it
¡°softening.¡± He also pointed to labor shortages as
worsening in April, undermining productivity.
Both the Furniture and Related Products sector and the
Wood Products sector reported growth in April.
Include plywood and hardwood veneer in ¡®Build
In an effort to support the plywood and hardwood veneer
industry, the Decorative Hardwood Association filed
comments on May 23 arguing that unfinished hardwood
plywood and hardwood veneer should be considered a
"construction material" under the Build America, Buy
Under the act, the U.S. government would be required, in
many instances, to buy 100% U.S.-made hardwood
plywood and veneer.
In April the Administration issued ¡°Guidance relating to
sourcing requirements under the Build America, Buy
America¡± portion of the Infrastructure Investment and
Jobs Act (IIJA).
Whitehouse announces plans to ease housing costs
The Biden administration released an action plan May 16
aimed at boosting the supply of affordable housing despite
rising home prices and overall high inflation.
The actions will help close the affordable housing gap and
¡°ease the burden of housing costs,¡± noting that house
prices are a key driver of inflation according to a White
CNN reports that the move is the latest step by the
administration to show it is working to get a handle on
high prices nationwide.
New policies are meant to leverage existing federal
funding to encourage state and local reforms to zoning and
land use policies, a senior administration official told
reporters, via funding from the bipartisan infrastructure
law and the Department of Transportation.
There are also steps to finance or produce more
manufactured housing, accessory dwelling units ¨C also
known as garage apartments, basement apartments or
backyard homes ¨C 2¨C4-unit properties and smaller
multifamily buildings, according to a White House fact
The administration will also direct supply of affordable
housing for owner-occupants, and the administration will
¡°work with the private sector to address supply chain
challenges and improve building techniques to finish
construction in 2022 on the most new homes in any year
since 2006,¡± the fact sheet said.