Housing starts unexpectedly showed a significant increase in the month of April, according to a report released by the Department of Commerce on Friday, with the data likely to offset some of the recent pessimism about the outlook for the housing market.
The report showed that housing starts jumped 8.2 percent to an annual rate of 1.032 million units in April from the revised March rate of 954,000 units. Economists had expected starts to edge down to 940,000 units from the 947,000 unit rate originally reported for the previous months.
Despite the unexpected monthly increase, however, housing starts in April were still 30.6 percent below the 1.487 million unit rate seen in the same month last year.
Peter Boockvar, Equity Strategist at Miller Tabak said, "We've all discussed the housing market ad nauseum so there is not much more to add, but the bottom line is the industry still has too many homes on the market and prices will continue to drop until an equilibrium is reached."
Strong performances in the Midwest and West contributed to the unexpected monthly increase, with housing starts in the regions rising by 24.4 percent and 18.5 percent, respectively.
While housing starts in the South edged up 3.6 percent, starts in the Northeast showed a notable 12.7 percent decrease.
The unexpected monthly increase also reflected a substantial 40.5 percent increase in starts for buildings with five units or more, which more than offset a 1.7 percent decrease in single-family housing starts.
With the decrease, single-family housing starts fell to their lowest level since January of 1991.
The report also showed that building permits, which are seen as an indicator of future housing demand, rose 4.9 percent to an annual rate of 978,000 in April from the revised March rate of 932,000 units. Nonetheless, building permits remained down 34.3 percent year-over-year.
As mentioned above, the report is likely to ease recent concerns about the outlook for the housing market, although economists will likely need to see more positive data before they start to believe that a recovery is underway.
On Thursday, a report from the National Association of Home Builders said that homebuilders remained considerably downbeat in May, as market conditions continued to erode.
The report showed that the NAHB/Wells Fargo Housing Market Index edged down to 19 in May from 20 in April, bringing it within one point of the record low of 18 set in December of 2007.
NAHB Chief Economist David Seiders said, "Despite the Federal Reserve's concerted efforts to lower short-term interest rates, free up credit markets and shore up the national economy, the housing market has shown no evidence of improvement thus far."
"In fact, conditions have continued to deteriorate in recent times," Seiders added.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.