Housing starts edge ahead in March
Despite inflation, growing mortgage rates, and rising home prices, housing starts moved ahead slightly in March.
But much of the growth was led by the multi-family sector.
Privately-owned housing starts increased 0.3% to a seasonally adjusted annual rate of 1.793 million from the revised February estimate of 1.788 million, according to the latest Monthly New Residential Construction report released this morning by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Housing starts are also 3.9% above the March 2021 rate of 1.725 million.
Single-family housing starts in March were at a rate of 1.200 million, which is 1.7% below the revised February figure of 1.221 million.
The March rate for units in buildings with five units or more was 574,000, rising 7.5% above the previous month and jumping 28.1% from the same period a year ago.
Building permits in March were at a seasonally adjusted annual rate of 1.873 million and 0.4% above the revised February rate of 1.865 million. The latest figure is also 6.7% above the March 2021 rate of 1.755 million.
Single-family permits for March were at a rate of 1.147, falling 4.8% from the revised February rate of 1.205 million.
Authorizations of units in buildings with five units or more were at a rate of 672,000 in March. This is a 10.9% increase compared to the prior month and 33.6% above the March 2021 rate.
“Higher mortgage interest rates and rising construction costs are pricing buyers out of the market, and these higher costs are particularly hurting entry-level and first-time buyers,” said Jerry Konter, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Savannah, Ga. “Policymakers must address building supply chain disruptions to help builders bring down construction costs and increase production to meet market demand.”
Here’s how housing starts and permits performed regionally in March compared to the prior month:
- In the Northeast, total starts soared 110.8% as single-family starts fell 12.3%. Total permits climbed 11.1% but single-family permits decreased 15.1%.
- In the Midwest, combined starts declined 2.9% while single-family starts increased 7%. Total permits saw a 2.8% increase as single-family permits receded by 6%.
- Overall starts in the South dropped 17.2% as single-family starts were down 2.6%. Total permits slipped 0.1% and single-family permits fell 3.3%.
- Starts in the West increased 7.7% but single-family starts were down 1.7%. Total permits stepped back 3.5% as single-family permits saw a 5.2% decline.
The latest Monthly New Residential Construction report follows yesterday’s news that builder sentiment had fallen for a fourth straight month.
Builder confidence in the market for newly-built single-family homes dropped two points lower to 77 in April, according to the latest NAHB)/Wells Fargo Housing Market Index (HMI).
“The shift in affordability can be seen in the March data with strength for multifamily construction and some weakness for single-family permits,” said NAHB Chief Economist Robert Dietz. “Our builder surveys show that confidence levels in the single-family market have declined for four straight months as affordability conditions continue to worsen, and this is a sign that single-family production will face challenges moving forward.”
