The U.S. Department of Labor released the Unemployment Insurance Weekly Claims Report. In the week ending May 16^th, weekly jobless claims totaled 2.4 million, a decrease from the previous week. It was the seventh straight week of a declining pace after the record peak of 6.9 million during the week ending March 28^th.

In the week ending May 16^th, the number of initial claims was at a seasonally adjusted level of 2,438,000, a decrease of 249,000 from the previous week’s revised level of 2,687,000 claims. The four-week moving average decreased to 3,042,000, from a revised average of 3,543,000 in the previous week. This week’s 2.4 million new claims brought the nine-week total to nearly 38.6 million.

Meanwhile, the number for seasonally adjusted insured unemployment, known as continuing claims, rose by 2,525,000 to 25,073,000 in the week ending May 9^th. The four-week moving average increased sharply by 2,313,500 to 22,002,250. The seasonally adjusted insured unemployment rate increased by 1.7 percentage points to 17.2% for the week ending May 9^th. The previous week’s rate was revised down by 0.2 percentage point from 15.7% to 15.5%.

The U.S. Department of Labor also released the advanced number of actual initial claims under state programs without seasonal adjustments. The unadjusted number of advanced initial claims totaled 2,174,329 in the week ending May 16^th, a decrease of 182,265 from the previous week.

The chart below presents the top 10 states ranked by the number of advanced initial claims for the week ending May 16^th. For the week ending May 16^th, California, New York and Florida reported the most advanced initial claims, while Wyoming, Vermont, and North Dakota had the least advanced initial claims. California led the way with 246,115 initial claims, followed by New York with 226,521 initial claims and Florida with 223,927 initial claims.

The COVID-19 pandemic hit each state differently during the past several weeks. For the week ending May 16^th, while Washington (+34,397), California (+33,448), and New York (+27,102) reported the largest increases in advanced initial claims, Georgia (-66,224), New Jersey (-28,366), and Kentucky (-22,336) had the largest decreases in advanced initial claims.

Confidence in the market for new multifamily housing weakened significantly in the first quarter of 2020, according to results from the National Association of Home Builders’ Multifamily Market Survey (MMS). The MMS consists of two indices: the Multifamily Production Index (MPI), which fell 22 points to 27 (Figure 1), and the Multifamily Vacancy Index (MVI), which rose 19 points to 59, with higher numbers indicating more vacancies (Figure 2). The MPI reading is the lowest since the fourth quarter of 2009 while the MVI reading is the highest since that same quarter.  It is important to note that this survey was conducted during the first part of April after the coronavirus pandemic hit.

The MPI measures builder and developer sentiment about current conditions in the apartment and condo market on a scale of 0 to 100. The index and all of its components are scaled so that a number below 50 indicates that more respondents report conditions are getting worse than report conditions are improving.

The MPI is a weighted average of three key elements of the multifamily housing market: construction of low-rent units—apartments supported by low-income tax credits or other government subsidy programs; market-rate rental units; and for-sale units—condominiums. All three components posted decreases in the first quarter: the component measuring low-rent units fell 21 points to 32, the component measuring market rate rental units dropped 21 points to 29 and the component measuring for-sale units decreased 24 points to 22.

The MVI measures the multifamily housing industry’s perception of vacancies in existing apartments. It is a weighted average of current occupancy indexes for class A, B, and C multifamily units, and can vary from 0 to 100, where a number over 50 indicates more property managers believe vacancies are increasing than decreasing. The MVI rose 19 points to 59 in the first quarter.

In the first couple months of 2019 multifamily production was solid, but weakened significantly with the onset of the COVID-19 pandemic. Builders and developers now face many uncertainties as the crisis has impacted operations, collections, permitting, inspections, and financing. NAHB forecasts that multifamily construction will decline more than single-family construction in this recession.

Historically, the MPI and MVI have performed well as leading indicators of U.S. Census figures for multifamily starts and vacancy rates, providing information on likely movement in the Census figures one to three quarters in advance. Multifamily starts were strong in the first quarter of 2020 (average seasonally adjusted annual rate of 522,000 units), but declined significantly in April (seasonally adjusted annual rate of 241,000 units), which is more in line with the MPI reading.

For data tables on the MPI and MVI, visit www.nahb.org/mms.

As indicated by the NAHB/Wells Fargo Housing Market Index (HMI), housing starts retreated in April due to the economic consequences of government-imposed lockdowns associated with virus mitigation.

Single-family starts were 25% lower in April, at a seasonally adjusted annual rate of 650,000. Since the peak rate in February, the pace of single-family construction has declined 37%. The April pace was the lowest since the first quarter of 2015.

The April single-family construction data was somewhat better than forecast, and the most recent HMI reading (rising from 30 to 37) suggests improvement in construction during May. Nonetheless, single-family permits were down 24% in April.

As an indication of how strong the start was for single-family construction in 2020, single-family starts on a year-to-date basis are actually 1.3% higher than the comparable 2019 totals (this is also a reflection of the weakness in early 2019 at the end of the interest-rate related housing soft patch).

While single-family starts were down nationwide, the declines were particularly concentrated in the Northeast (66% decline from March) and the West (42% from March).

The multifamily sector, which includes apartment buildings and condos, decreased 40.5% to a 241,000 pace. This reflects an almost 62% decline for multifamily construction relative to the strong January pace at the start of 2020. NAHB’s forecast calls for multifamily construction to decline more than single-family construction during this recession.

In terms of economic impact, there were 532,000 single-family homes under various stages of construction in April. This was down almost 2% from March but was an 11% improvement from the housing soft patch of 2018-2019 last April. There were 669,000 multifamily units under construction in April, a negligible decline from March. But this total is almost 15% higher than April of 2019. These numbers will decline in the months ahead as the starts rate remains at a weaker pace.