Nationwide housing starts rose for a third consecutive month in March to a seasonally adjusted annual rate of 626,000 units from an upwardly revised February number, according to figures released by the U.S. Commerce Department. The rate of permit issuance for new housing construction also rose by a solid 7.5 percent in the month, to a seasonally adjusted annual rate of 685,000 units.
“After an uncertain couple of months, home builders are gradually getting back to what they do best as the spring home-buying season commences and consumers return to the market,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “While we still have a long way to go, today’s numbers are an indication that builders are looking down the road with a bit more optimism.”
“This report is very encouraging, because it signifies that home builders are confident enough to begin work on homes that will very likely be completed after the expiration of the home buyer tax credits,” said NAHB Chief Economist David Crowe. “The solid gain in permit issuance last month is particularly welcome news, since those numbers are generally a reliable indicator of future building activity. That said, considerable headwinds continue to impede housing’s recovery, including the critical shortage of credit for housing production that is stifling new development in reviving markets.”
While single-family starts slipped 0.9 percent in March, this small decline from an upwardly revised number the previous month was due entirely to a drop-off in the Midwest from an abnormally high February level; all other regions reported single-family gains in March. Nationwide multi-family starts gained 18.8 percent to a 95,000-unit rate for the month. The 7.5 percent gain in nationwide building permits reflected a 5.6 percent uptick to 543,000 units on the single-family side and a 15.4 percent gain to a 142,000-unit rate on the multi-family side.
Regionally, combined single- and multi-family starts activity rose 18.2 percent in the South, which is the largest regional housing market, but fell 28.4 percent in the Midwest, 8.3 percent in the Northeast and 2.1 percent in the West. Combined permit activity rose 17.6 percent in the Midwest and 18.4 percent in the South, but fell 19.5 percent in the Northeast and 6.7 percent in the West in March.
Privately-owned housing completions in March were at a seasonally adjusted annual rate of 656,000. This is 3.1 percent below the revised February estimate of 677,000 and is 21.2 percent below the March 2009 rate of 833,000. Single-family housing completions in March were at a rate of 486,000; this is 5.9 percent above the revised February rate of 459,000. The March rate for units in buildings with five units or more was 161,000.