Housing starts increased to a seasonably adjusted annual rate of 2.007 million units in March, the Commerce Department reported. The pace was 6.4 percent above February’s upwardly revised rate of 1.887 million and 15.2 percent above the March 2003 pace.
“The housing market was supported by historically low interest rates, rising house values and a strengthening economy,” said Bobby Rayburn, president of the National Association of Home Builders (NAHB) and a home and apartment builder from Jackson, Miss. “Builders remain confident about the market and expect to maintain a healthy pace through the coming months as we strive to keep up with strong demand for single-family homes and condominiums.”
“Favorable market conditions continue to bode well for housing. The interest rate structure remains favorable, national, regional and local economies are strengthening, growth of employment and household income is picking up, and household formations are increasing in the process,” said NAHB Chief Economist David Seiders.
“Although interest rates have moved up since the end of March, the strengthening economic and demographic fundamentals will provide strong support to housing demand as the year progresses,” Seiders added. “Indeed, NAHB surveys of builders suggest that the initial impact of the rate reversal has been to strengthen, rather than weaken, buyer demand.”
For the month, single-family housing starts increased 5.5 percent to a pace of 1.599 million. This was a 14.8 percent increase over the March 2003 pace.
Multifamily housing starts increased to a seasonally adjusted rate of 408,000 units, a 9.7 percent increase from February and a reflection of the ongoing strength of the condominium market. The multifamily pace was 16.9 percent above a year earlier.
Construction of new homes and apartments increased across all regions except the Northeast, which fell by 4.9 percent following a temporary surge in February.
For the month, issuance of total building permits increased 1.9 percent from February to a seasonably adjusted rate of 1.946 million units. This was 15.3 percent above March 2003. Single-family permit issuance increased by 0.4 percent and multifamily permits were up 7.9 percent from the February pace.
“Builders are positioned quite well. Inventories are lean, there’s a sizeable backlog of unused building permits and buyer demand promises to remain strong,” said Seiders. “This environment bodes well for house prices as well as for home sales and production”