Housing starts sizzle in March
Housing starts sizzled in March with buyer demand remaining solid, partially fueled by low mortgage rates.
Total housing starts jumped 19.4% to a seasonally adjusted rate of 1.74 million, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The National Association of Home Builders (NAHB) reported that this is the fastest pace for combined single-family and multifamily construction since June 2006.
Single-family starts increased 15.3% to a 1.24 million seasonally adjusted annual rate. Compared to the first quarter of 2020, single-family starts are up 19.6%.
The multifamily sector, which includes apartment buildings and condos, soared 30.8% to a 501,000 pace.
Overall permits for March are up 2.7% to a 1.77 million unit annualized rate. Single-family permits increased 4.6% to a 1.2 million unit rate with multifamily permits slipping 1.2% to a 567,000 pace.
But the NAHB said that further progress in residential construction continues to be restrained by a number of obstacles, despite firm builder sentiment.
“Builder confidence remains strong, pointing to gains for single-family construction in 2021,” said NAHB Chairman Chuck Fowke. “However, rising costs for most kinds of building materials continue to impede positive additional momentum in the market.”
“Demand remains solid due to low mortgage interest rates and a thin level of inventory in the resale market, which is spurring the need for additional supply,” said NAHB Chief Economist Robert Dietz. “The test for the industry this year will be balancing growth and higher construction costs, given ongoing housing affordability challenges.”
Here’s how housing starts and permits performed on a regional basis:
- In the Northeast, total starts jumped 64% as single famly starts are up 28.6%. Total permits decreased 8% as single-family permits saw no change.
- Total starts in the Midwest leaped 122.8% with single-family starts rising 106%. Permits edged up by 2% and single-family permits rose 1.2%.
- Overall starts in the South rose 13.5% with single-family starts growing by 10.9%. Total permits climbed by 6.4% with single-family permits rising 8%.
- The West saw total starts decline 13.6% as single-family starts fell 12.6%. Total permits were flat with single-family permits showing just a 0.7% increase.
