Steel Markets
Housing Data Plummets in April, But HMI Shows Market Confidence
Written by Sandy Williams
May 19, 2020
Housing starts plummeted 30.2 percent in April compared to March, falling to a seasonally adjusted annual rate of 891,000 and the lowest level since 2015. Compared to April 2019, starts tumbled 27.9 percent, said the U.S. Census Bureau and the Department of Housing and Urban Development.
Building permit authorizations were at a SAAR of 1,074,000, a 20.8 percent decline from March and 19.2 percent below the year-ago rate.
“Housing starts retreated in April due to the economic consequences of government-imposed lockdowns associated with virus mitigation,” said Robert Dietz, chief economist at the National Association of Home Builders.
Single-family starts dropped 25.4 percent in April while permits fell 19.2 percent. Starts for housing of five units or more plunged 40.3 percent and permits 12.4 percent. Housing start declines were present across all four regions, falling the greatest in the Northeast (66 percent) and the West (42 percent).
Home construction was designated as an essential business by most states during the crisis, but supply disruptions impacted building activity.
“The designation of home construction as an essential business during the crisis helped keep most residential construction workers on the job, which is reflected in the May HMI,” said Dietz.
The May Home Builders/Wells Fargo Housing Market Index (HMI) indicated a renewed confidence by builders that the housing market was stabilizing and moving forward as the nation reopens from COVID-19 shutdowns. The HMI increased seven points to 37 in May, following a record monthly decline in April.
A number of measures were taken to ensure that buyers have access to information about new housing, including virtual tours and online closings. Low interest rates and recent increases in mortgage applications indicate buyer demand is improving, said Dietz.
“However, high unemployment and supply-side challenges including builder loan access and building material availability are near-term limiting factors,” he added.
NAHB is forecasting that multi-family construction will decline more than single-family construction during this recession.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets
Tampa Steel Conference: Two weeks to go!
With just two weeks to go, we have over 400 registered so far for the 36th annual Tampa Steel Conference. Join us and hundreds of industry executives at the JW Marriott Tampa Water Street from Sunday, February 2, through Tuesday, February 4.
Galvanized buyers see glimmers of optimism amidst the chaos
Reflecting on 2024 and looking ahead to the new year, galvanized steel buyers on this month’s HARDI call expressed a mix of cautious optimism with lingering uncertainties.
Construction spending steady in November
Construction spending inched higher in November for a second straight month.
Steady architecture billings signal improving conditions
The November ABI decreased month over month but was still the third-highest reading of the past two years.
Fitch warns more tariffs will pressure global commodity markets
“New commodity-specific tariffs, mainly on steel and aluminum products, could widen price differentials and divert trade flows,” the credit agency forewarned.