Housing Starts Declined in March

U.S. privately owned housing starts for March totaled the highest amount for the month in the past 10 years, with the pace at a 10-year high through the first quarter, federal data released Tuesday showed.

Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,215,000, which is 6.8 percent below the revised February estimate of 1,303,000-but it is also 9.2 percent above the March 2016 rate of 1,113,000. Despite that, new housing production in the first quarter of this year is running 8.1 percent above the pace in 2016. "Homebuyers should rest assured that new home building will continue to relieve their supply constraint in the long-run". Building permits in March were at a rate of about 1.260 million, an increase of 3.6% compared with 1.216 million in February and an increase of 17.0% compared with 1.077 million in March 2016.

Economists had expected housing starts to drop by 2 percent to a rate of 1.262 million from the 1.288 million originally reported for the previous month.

"Much warmer-than-usual weather in the first two months of the year pulled starts forward into those months, and March - with more normal temperatures - saw the payback with declines in both single- and multifamily construction", said David Berson, chief economist at Nationwide Mutual Insurance.

"[These] numbers are aligned with our builder confidence metric, which contracted slightly this month but is on solid footing overall", says Granger MacDonald, chairman of the National Association of Home Builders (NAHB).

More properties will likely begin construction in the coming months.

But strengthening demand and builder sentiment have yet to generate enough construction to sufficiently boost the availability of homes. They rose 3.2 percent in the South, but fell 5.5 percent in the West. Multifamily permits rose 13.8 percent to 437,000 units while single-family permits edged down 1.1 percent to 823,000.

  • Anthony Vega