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March Building Permits Soar 30.1% Above March 2011 in Best Action Since Late 2008

The U.S. Census Bureau said privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 747,000, 4.5% above the revised February rate of 715,000 and 30.1% above the March 2011 estimate of 574,000.
April 19, 2012
3 min read

The U.S. Census Bureau said privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 747,000, 4.5% above the revised February rate of 715,000 and 30.1% above the March 2011 estimate of 574,000.

Single-family authorizations in March were 462,000, 3.5% below the revised February figure of 479,000, but 17.9% above March 2011. Authorizations of units in buildings with five units or more were at a rate of 262,000 in March, up 24.2% from February 2012 and up 57.8% above March 2011.

Privately-owned housing starts in March were at a seasonally adjusted annual rate of 654,000, 5.8% below the revised February estimate of 694,000, but 10.3% above the March 2011 rate of 593,000. Single-family housing starts in March were 462,000, 0.2% below the revised February figure of 463,000, but 10.5% above March 2011.

Two economists with IHS Global Insight said in a press release that the increases in the March building permit data bode particularly well for the housing market. Patrick Newport and Michelle Valverde, both U.S economists for the firm, said the 747,000 total annual rate for building permits in March was the highest level since Sept. 2008 and that at their 285,000 annual rate, multi-family permits rose to the highest since August 2008.

“The key numbers in this report are the housing permits — not the starts,” they said in the report. “The permits are better measured than starts, are less influenced by weather and are forward looking. March’s housing permits numbers were the highest since Sept. 2008. More important, they are tilting up. Single-family permits were down 3.5%, not a big surprise since new home sales remain depressed. Multi-family permits rose 20.8%, to a 285,000 annual rate, the highest since August 2008. The pickup in multi-family construction is taking place most noticeably in the South and West — again, not a big surprise—since 46 of the 50 fastest-growing metro-area populations from 2010 to 2011 were in the South or West, according to the Census Bureau.

“On balance, this was a good report — the good news on permits more than offsets the bad news on starts. The report shows further signs of life in the housing market, but mostly in the multi-family category. What remains unclear is the state of the single-family housing market — which represents two-thirds of the overall market. One head scratcher is why single-family permits and starts and builder sentiment have improved over the past five months when new home sales remain depressed. If the builders have gotten ahead of the game, single-family construction will go through a demoralizing slowdown later this year.

“Overall, we project that housing starts will rise from 610,000 in 2011 to 740,000 this year. The housing market will make further improvements in 2013, but conditions will not return to normal until about 2015, when housing starts finally climb above the 1.5 million threshold.”