The Census Bureau reported April new residential construction data on Friday. According to DA Davidson analysts, the single-family housing market remains resilient but soft.
April housing starts came in at a seasonally adjusted annualized rate of 1.47 million, down 3% from March but up 5% year-over-year due to multifamily gains. Single-family starts registered 930,000 in April, declining from March levels.
The single-family starts rate was down 2% year-over-year and 9% month-over-month. The single-family permitting rate for April was 872,000, marking a 3% monthly decline and 6% year-over-year decrease.
Multifamily construction continued its strong start to the year, with the starts pace in April up 23% year-over-year.
Geographically, on a year-to-date basis, the Midwest has been the best-performing region with single-family starts up 5% year-over-year, followed by the South down 5%, the West down 6%, and the Northeast down 19%.
Units under construction extended their streak of year-over-year declines to 33 months, with total units 9% lower than last year and single-family units 7% lower.
Production builders have made progress reducing unsold inventory. Builder confidence remains challenged, with the Housing Market Index well below 50.
Industry forecasters expect low single-digit year-over-year declines in single-family and total housing starts for 2026.
DA Davidson maintains Buy ratings on Trex Company (TREX) and Louisiana-Pacific (LPX), both labelled Top Pick, noting both companies have greater repair and remodeling exposure in their core businesses.
