Housing starts dipped 0.8% in March compared with February and were down 17.2% compared with March 2022, however, single-family production was up month-over-month, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Overall, starts were at a seasonally adjusted annual rate of 1.42 million, down from 1.43 million the previous month and down from 1.7 million a year earlier.
Starts of single‐family homes were at a rate of 861,000, an increase of 2.7% compared with February.
Starts of multifamily units (five units or more per building) were at a rate of 542,000, down 6.7% compared with February.
Regionally, and on a year-over-year basis, combined single-family and multifamily starts were down 34.5% in the Midwest, 28.2% in the West, 11.5% in the South and 8.3% in the Northeast.
Building permits also fell. They were at a rate of 1.4 million, a decrease of 8.8% compared with February and down 24.8% compared with March 2022.
Permits for single‐family homes were at a rate of 818,000, an increase of 4.1% compared with February.
Permits for multifamily dwellings were at a rate of 543,000, a decrease of 24.3% compared with the previous month.
Regionally, and year-over-year, total housing permits were down 28.1% in the West, 25.3% in the Midwest, 24.5% in the Northeast, and 15.7% in the South.
Housing completions were at a seasonally adjusted annual rate of 1.54 million – a decrease of 0.6% compared with February.
Although housing starts dipped in March, home builder sentiment, as measured by the National Association of Home Builders (NAHB), increased in April, giving hope that more supply is on the horizon.
“With builder sentiment climbing for four consecutive months and single-family starts continuing to move gradually higher from low levels since the beginning of the year, this indicates that a turning point for single-family construction will occur later this year after declines in 2022,” says Alicia Huey, chairman of NAHB, in a statement. “However, builders are still challenged by ongoing supply-chain issues and a skilled labor shortage.”
“We expect choppiness for single-family construction in the months ahead, with the 2023 data posting significant year-over-year weakness before improving on a sustained basis,” adds Robert Dietz, chief economist for NAHB. “The multifamily market softened in March, and we anticipate ongoing declines for apartment construction in the months ahead due to tighter lending conditions in the commercial real estate sector.”
“Plenty of headwinds remain for the new-home sector – mortgage rate uncertainty, higher costs, and ongoing supply-side challenges,” says Odesa Kushi, deputy chief economist for First American, in a statement. “While there was some positive news for single-family homebuilding this month, it’s not yet clear if a sustained recovery is on the horizon.”
Photo: Avel Chuklanov