March Home Starts Up By a Hair, as Midwest Surges
Led by a 44.5% rebound in the beleaguered Midwest from a sharp decline in February, national housing starts edged up a scant 0.8% in March to a seasonally adjusted annual rate of 1.518 million, the Commerce Department reported on April 17.
Construction of new single-family homes, boosted by a 35.9% surge in the Midwest, rose 2.0% in March to a seasonally adjusted annual rate of 1.218 million units. This was 24.6% below the pace of a year earlier. Multifamily housing construction fell 3.8% for the month to a seasonally adjusted annual rate of 300,000 units, down 16.0% from a year earlier.
"Builders, overall, have been systematically cutting back on new building activity for more than a year now," said NAHB President Brian Catalde. "This slowdown is enabling them to reduce their inventory and better position themselves for the balance of the year, especially when faced with uncertainties over the impacts of the subprime-related tightening of mortgage lending standards on home sales."
"This was the second warmest March on record, and the numbers for starts and permits undoubtedly were supported by this factor," said NAHB Chief Economist David Seiders. "Furthermore, extreme gyrations in the numbers for the Midwest region have obscured underlying trends for several months."
"Nationally, housing starts for the first quarter of this year were down by 5.5% from the final quarter of 2006 and nearly 30% below the first quarter of last year," Seiders said. "NAHB's forecast shows another modest decline in the second quarter, followed by a gradual recovery beginning around mid-year. We now expect total housing starts for 2007 to be down by 20% from last year."
Regionally, production of new homes and apartments was down in the Northeast, South and West by 6.1%, 2.7% and 7.7%, respectively. The 44.5% increase in the Midwest was the region’s first upturn in six months. The pace of construction in March was well below a year earlier in all four regions.
Permit issuance increased 0.8% for the month to a seasonally adjusted annual pace of 1.544 million units, 25.9% below the level of a year earlier. Single-family permits rose 1.4% to 1.114 million units, off 28.4% from their year-earlier rate, and multifamily permits increased 1.6% to 440,000 units, 17.0% below the March 2006 annual rate.
How Deep Is the Correction? Attend Construction Forecast Conference on April 26
Will housing demand outweigh affordability hurdles, inventory overhangs and the retreat of investors? Where are home prices headed?
Get the answers to these and other questions at the Construction Forecast Conference — Spring 2007 on Thursday, April 26 in Washington, D.C.
Panels of nationally recognized experts will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys at the day-long conference.
For more information and to register, click here.
Can't Attend in Person? Webcast of Conference Also Available
The conference is also available via Webcast. For Webcast information, visit www.nahb.org/cfcwebcast.
Want to Know Your State’s Starts Forecast for 2008?
Find out in HousingEconomic.com’s State Starts Forecast (sample). The starts forecast includes downloadable Excel tables of total, single-family and multifamily starts by region and state.
To learn more, visit www.housingeconomics.com.
NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.