April 2000 Starts Pace Higher Than a Year Ago

April 2000 total housing starts were at a seasonally adjusted annualized level of 1.663 million units, after averaging almost 1.8 million units (annualized) during the December 1999-Febru- ary 2000 period. March's total (at 1.618 million units) was the lowest monthly level recorded since June of last year. But the dominant single-family sub-sector of the market continues to perform very well; almost all of the drop-off in starts activity during the past few months has come from the multifamily subsector (which had soared to un- sustainable levels of activity in January and February).

Overall starts during April of this year were at an annualized level 6.5% better than during April 1999. Although single-family homes were started at a rate 7.8% below the peak level recorded during the final month of last year, they were better than 6% ahead of the level for the same month of 1999. And, despite recent-month losses, total multi-family starts this April were almost 2% ahead of where they stood at year-end 1999 and about 7% above the comparable total for April of last year.

Although no significant slow-down in housing market activity is apparent in the latest starts report, an analysis of longer-term trends does provide evidence that at least the single-family sector of the overall market has been impacted by higher mortgage rates and greater uncertainty about the future pace of personal income growth. Additionally, single-family home sales figures weakened considerably over the first quarter of the year. Regionally, two of the four regions recorded declines in housing starts between March and April of 2000. The starts pace in the Northeast faded 10.1% over the month to its lowest level since October 1999. And overall starts in the South fell 6.2% over the latest two months to their lowest annualized pace since last November—but still 4.4% ahead of their April 1999 total. The number of housing units started in the Midwest was estimated to have risen 12.4% (sea- sonally adjusted) between March and April, while total starts in the West rose 18.2% over the month.

April 2000 starts were above their April 1999 comparable total for all regions, with the West and Midwest regions leading the way.

Total starts through the first four months of 2000 were estimated at 515,400 units—a negligible 0.1% drop from the total for January-April 1999.

Through 4/00, total starts were ahead of the year-ago total in the Midwest (+8.5%), Northeast (+2.4%), and West (+1.3%), but were off -4.3% in the South.