Housing Starts Lose Further Ground in March
Builders continued to slow the pace of new-home construction in March amidst ongoing erosion of the overall economy and credit markets, according to U.S. Commerce Department figures released on April 16.
Total housing starts fell nearly 12% to a seasonally adjusted annual rate of 947,000 units in March, including a 5.7% drop in single-family to a rate of 680,000 units. The multifamily side continued to display extreme month-to-month volatility, skidding 24.6% to a yearly pace of 267,000 units.
“Builders are dramatically limiting starts of new homes in an environment of weak sales and heavy supply, ratcheting down production of single-family units to its slowest pace in 17 years,” noted NAHB President Sandy Dunn.
“We’re doing everything in our power to bring the supply and demand equation back into balance and restore housing to its rightful place as an engine of economic growth,” she said. “But now that we are in a genuine economic recession, there’s no question that more needs to be done at the federal level to support housing, shore up consumer confidence and limit the degree and duration of the economic contraction.”
“The Senate has done a fine job already in moving forward with beneficial legislation, and we applaud its efforts to this point,” added Dunn. “We urge the House to do the same thing and advance a bill that can be reconciled with the Senate’s version and promptly sent to the President’s desk. Now is the time, during the spring home buying season, to implement measures that will have the greatest positive effect on housing and the economy.”
“Builders in the field continue to report that prospective buyers are visiting their model homes, but most are either unwilling or unable to go forward with a purchase given the downward trends in employment and home values as well as the tightening of mortgage credit conditions,” said NAHB Chief Economist David Seiders.
“It stands to reason that incentives such as a temporary home buyer tax credit and improvements to the housing finance system would help boost consumer confidence in the market and have a significant stimulative effect that could arrest housing’s heavy drag on economic growth,” he said. “Such measures, combined with the Federal Reserve’s aggressive moves to lower interest rates and improve the functioning of financial markets, definitely would have substantial beneficial effects on the overall economy.”
Permits were down 5.7% in March for single-family construction and 5% for multifamily.
Regionally, housing starts lost ground across the board in March, with declines of 5.7% in the West, 8.5% in the Northeast, 12.6% in the South and 21.4% in the Midwest.
Permits were up 0.4% in the South and 3.8% in the Northeast, but down 10.6% in the Midwest and 20% in the West.
Attend the Spring Construction Forecast Conference in April
Plan to attend NAHB's Spring Construction Forecast Conference on Thursday, April 24 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.
Can't attend? Watch the conference webcast live.
For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview).
Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
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.