April Housing Data Sends Mixed Signals Ahead of Summer
Housing Data
The April residential construction report from the Department of Commerce was released on May 16th, indicating a housing market in transition. Housing starts, measuring the number of new homes that began construction, rose a modest 1.6% from March, reaching a seasonally adjusted annual rate of 1.361 million units. However, compared to April 2024, that represents a 1.7% decline. Meanwhile new residential permits fell 4.7% from March and 3.2% year-over-year, which could be a troubling sign from this forward looking indicator.
At first glance, the increase in starts might suggest improving confidence among builders. Some of that may stem from the recent pause in reciprocal trade tariffs, which had pushed up material costs earlier in the year and created uncertainty around supply chains. However, the Census Bureau itself cautions against reading too much into monthly movements. As noted in the report’s explanatory notes, “month-to-month changes in seasonally adjusted statistics often show movements which may be irregular… it may take up to six months to establish a reliable trend.” In that light, April’s gain in starts looks more like a temporary shift than a clear sign of recovery, particularly as the year-over-year decline reflects economic pressures in the housing sector.
The decline in new permits offers perhaps the clearest warning sign. The drop suggests that builders are feeling the heat from multiple directions; unclear interest rate policy, rising regulatory burdens, and tariffs raising input costs. Builders are facing a complex, high-risk environment. On the consumer side, economic volatility is weighing on household confidence, draining the faith needed to commit to a new home.
One clear casualty of this uncertainty is single-family housing. Permits for single-family homes continued falling, and dropped 5.1% from March and 6.2% from a year earlier per report. Single-family homes are more vulnerable to shifts in consumer attitude and mortgage costs, and affordability remains out of reach for many households. That may leave a growing subdivision of would-be homeowners stuck between high rents and inaccessible purchase options.
Looking ahead to the next report, scheduled for release on June 18th, analysts will be watching closely to see whether April’s gain in starts continues or fades. If permits remain soft and start numbers level or fall, it could signal a broader slowdown heading into the summer. However, a rebound in permits would suggest that builders are adjusting to current conditions and re-engaging cautiously. Either way, the June report is likely to offer the clearest signal yet about where housing activity is headed for the second half of 2025.