According to data released today by the U.S. Census Bureau, total quarterly new housing starts in March recorded an annualized 1.739 million units, the highest level since June 2006, up 19.4% compared to the previous month, with an expected increase of 13.5% and a decrease of 10.3% in the previous value in February. Housing Starts Permits recorded an annualized rate of 1.176 million units in March, up 2.7% month-over-month, compared to expectations of a 1.7% increase and a 10.8% decrease in February.
Breakdown of housing starts by housing type is as follows.
Single-family housing starts in March were up 15.3% month-over-month to an annualized 1.238 million, while single-family housing starts permits in March were up 4.6% month-over-month to an annualized 1.199 million.
Multifamily housing starts in March increased 30.8% month-over-month to 501,000 annualized, while multifamily housing starts in March decreased 1.2% month-over-month to 567,000 annualized.
Some market participants said after the release of the data that the 1.2% month-over-month decrease in multifamily housing starts represents a decrease in builders’ willingness to build multifamily housing with a rental component.
By region, starts increased in the Northeast, Midwest and South last month, but declined in the West.
There is a market view that the U.S. housing market is being driven by greater and more expensive housing demand, with the current new crown epidemic entering its second year, millions of Americans continuing to work from home, and telecommuting continuing. And the lack of housing supply, combined with record-low housing inventories, are supporting residential construction. But tight supplies and soaring lumber prices could limit builders’ ability to expand capacity and ease the housing shortage, which could slow the housing market’s hot trend.
Confidence among single-family homebuilders increased in April due to increased buyer admissions, according to a survey released Thursday by the National Association of Home Builders (NAHB), said NAHB President Chuck Fowke.
While builders are doing their best to keep prices stable in a home market that needs more inventory, policymakers need to find ways to increase the supply of building materials in 2021 when the economy turns hot.
And according to ex-factory price data released last week, the price of soft lumber used to frame and truss houses rose 83.4 percent in March from a year earlier to a record high, while the price of materials such as plywood, which is also used in construction, also rose sharply. In addition, according to a survey released earlier this month by the Institute for Supply Management (ISM), port congestion on the U.S. West Coast, as well as winter weather in Canada, which led to plant closures and trucking restrictions, also caused a shortage of construction materials and made prices rise.
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