U.S. Housing Starts Pull Back Much More Than Expected In April

New residential construction in the U.S. pulled back by much more than anticipated in the month of April, according to a report released by the Commerce Department on Wednesday.

The report said housing starts plunged by 3.7 percent to an annual rate of 1.287 million in April after jumping by 3.6 percent to an upwardly revised 1.336 million in March.

Economists had expected housing starts to drop to an annual rate of 1.310 million from the 1.319 million originally reported for the previous month.

The bigger than expected decrease reflected a sharp pullback in multi-family starts, which plummeted by 11.3 percent to a rate of 393,000 in April after spiking by 13.6 percent to 443,000 in March.

Meanwhile, the Commerce Department single-family starts inched up by 0.1 percent to a rate of 894,000 in April after falling by 0.8 percent to 893,000 in March.

The report said building permits also tumbled by 1.8 percent to an annual rate of 1.352 million in April after surging up by 4.1 percent to an upwardly revised 1.377 million in March.

Building permits, an indicator of future housing demand, had been expected to edge down to 1.350 million from the 1.354 million originally reported for the previous month.

Multi-family permits slumped by 6.3 percent to a rate of 493,000 in April after soaring by 20.4 percent to 526,000 in March.

On the other hand, single-family permits climbed by 0.9 percent to a rate of 859,000 in April after plunging by 4.0 percent to 851,000 in the previous month.

Compared to the same month a year ago, housing starts in April were up by 10.5 percent and building permits were up by 7.7 percent.

The National Association of Home Builders released a separate report on Tuesday showing an unexpected improvement in homebuilder confidence in the month of May.

The report said the NAHB/Wells Fargo Housing Market Index rose to 70 in May from a downwardly revised 68 in April.

Economists had expected the index to come in unchanged compared to the 69 originally reported for the previous month.

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