[ForexNews]

Housing starts tumbled 12.8% m/m to a new record low of 458,000 in April (data go back to 1959). The decline was driven entirely by a 46% plunge in multi-family starts, which are notoriously volatile. Looking past the choppiness, multi-family construction has fallen sharply over the past year, bringing construction to a record low and down 72% y/y. It seems likely that multi-family starts have yet to bottom, given the 20% drop in multi-family permits in April. In contrast, single-family starts rose 2.8% after essentially holding steady in March and February. Permits for single-family homes also edged up by 3.6%. Builders have already slashed single-family homes (built for sale) below the pace of new home sales, which has successfully reduced inventory. This has allowed builders to consider slowly increasing construction in some housing markets which do not have a huge overhang of existing homes for sale. The leveling off of single-family starts is consistent with the improvement in the NAHB housing index.