Home construction starts plunged in April by the most in records back to 1959, as the nationwide lockdown to control the spread of the coronavirus hammered the housing market and broader economy.
Residential starts plummeted 30.2% to an 891,000
The slowdown in residential construction represents a rapid turn of events for the nation's homebuilders, which were seeing solid demand entering 2020 on the heels of a steady job market and cheap borrowing costs. Sales and starts may begin to stabilize in coming months as most U.S. states relax business restrictions and mortgage rates hold near all-time lows.
The Commerce Department's data showed single-family starts dropped 25.4% to a five-year low 650,000 annualized rate. Multifamily starts, a category that tends to be volatile and includes apartment buildings and condominiums, plunged 40.5% to a 241,000 pace.
April may mark the bottom for home construction. A report Monday showed a gauge of builder sentiment advanced in May, a month after the worst decline on records back to 1985. The National Association of Home Builders/Wells Fargo Housing Market Index climbed by 7 points to 37 as firms cited better sales, demand expectations and prospective buyer foot traffic.
Stay-at-home orders across the country from mid-March through mid-April impacted professional and do-it-yourself retail business at Home Depot Inc., according to quarterly results announced Tuesday by the home-improvement retailer. Shares fell in premarket trading after the company's first earnings miss in six years.