Single-Family Starts Improve in March
Overall housing starts in March decreased 0.8 percent to a seasonally adjusted annual rate of 1.42 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
The March reading of 1.42 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 2.7 percent to an 861,000 seasonally adjusted annual rate. However, this remains 27.7 percent lower than a year ago. The multifamily sector, which includes apartment buildings and condos, decreased 5.9 percent to an annualized 559,000 pace.
NAHB’s take on the data
“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 the National Association of Home Builders. “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,” says NAHB Chief Economist Robert Dietz. “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.”
Looking at the regional data
On a regional and year-to-date basis, combined single-family and multifamily starts were 8.3 percent lower in the Northeast, 34.5 percent lower in the Midwest, 11.5 percent lower in the South and 28.2 percent lower in the West.
Overall permits decreased 8.8 percent to a 1.41 million unit annualized rate in March. Single-family permits increased 4.1 percent to an 818,000 unit rate, but are down 29.7 percent compared to a year ago. Multifamily permits decreased 22.1 percent to an annualized 595,000 pace. Looking at regional permit data on a year-to-date basis, permits were 24.5 percent lower in the Northeast, 25.3 percent lower in the Midwest, 15.7 percent lower in the South and 28.1 percent lower in the West.
The number of single-family homes under construction in March was 716,000, the 10th monthly decline. In March, builders completed 15,000 more homes than began construction, resulting in a decline for the construction pipeline. There are now 958,000 apartments under construction, which is the highest level since the fall of 1973.