Tuesday, April 16, 2013
Housing starts take big jump in March
Housing
starts jumped last month to their highest level since 2008 but
construction of single-family homes took a dip, the Census Bureau
reported Tuesday.
Total starts were up 7% in March from February, running at a 1.036 million seasonally adjusted annual rate, a gain of almost 47% over last March.
That level of activity marks the first time housing starts have passed 1 million in 57 months, says Robert Wetenhell of RBC Capital Markets.
'Housing fundamentals are rapidly improving," he says, adding that starts will continue moving higher this year.
Multi-family starts drove March's increase, rising 31% from February, to the third highest reading since 2000, Capital Economics says.
By contrast, single-family housing starts were running at a 619,000 rate, down 4.8% from February, Census said. That news came a day after a report that home builder confidence fell for a third month.
"Clearly, the home building recovery is running into a few snags. Building material costs are rising, there's a shortage of construction workers and builders are struggling to find easily developed lots," says Paul Diggle, Capital Economics economist.
Still, the big rise in overall housing starts in March should help to calm the nerves of those worrying that the home building recovery is running out of steam, he said.
For March, building permits, an indicator of future construction, fell 3.9% from February, to a 902,000 annual rate.
While the jump in multi-family housing starts boosted activity in March, a boom in rental apartments is a negative for single-family home building, builders and private home re-sellers, says Mark Hanson, a real estate adviser to professional investors. He expects a flood of apartments and single family homes for rent to outpace demand.
New residential construction fell 5.8% in the Northeast last month, but showed gains in the rest of the country led by a 10.9% rise in the South. Construction was up 9.6% in the Midwest and 2.7% in the West.
While home builder confidence took a hit in April, builders' expectations for sales the next six months hit the highest level in six years, the National Association of Home Builders/Wells Fargo Housing Market index showed.
The optimism is largely being driven by the low inventory of homes for sale, mortgage rates that remain near historic lows and rising consumer confidence, says NAHB's chief economist David Crowe.
Still, the comeback for new-home sales and construction will take years, experts say. New home sales should hit 463,000 this year, up from a dismal 366,000 last year, says IHS Global Insight. It doesn't expect sales to climb back to more historically normal levels, above 800,000, until 2015.
Contributing: Associated Press
http://www.usatoday.com/story/money/business/2013/04/16/housing-starts-march/2087107/
Total starts were up 7% in March from February, running at a 1.036 million seasonally adjusted annual rate, a gain of almost 47% over last March.
That level of activity marks the first time housing starts have passed 1 million in 57 months, says Robert Wetenhell of RBC Capital Markets.
'Housing fundamentals are rapidly improving," he says, adding that starts will continue moving higher this year.
Multi-family starts drove March's increase, rising 31% from February, to the third highest reading since 2000, Capital Economics says.
By contrast, single-family housing starts were running at a 619,000 rate, down 4.8% from February, Census said. That news came a day after a report that home builder confidence fell for a third month.
"Clearly, the home building recovery is running into a few snags. Building material costs are rising, there's a shortage of construction workers and builders are struggling to find easily developed lots," says Paul Diggle, Capital Economics economist.
Still, the big rise in overall housing starts in March should help to calm the nerves of those worrying that the home building recovery is running out of steam, he said.
For March, building permits, an indicator of future construction, fell 3.9% from February, to a 902,000 annual rate.
While the jump in multi-family housing starts boosted activity in March, a boom in rental apartments is a negative for single-family home building, builders and private home re-sellers, says Mark Hanson, a real estate adviser to professional investors. He expects a flood of apartments and single family homes for rent to outpace demand.
New residential construction fell 5.8% in the Northeast last month, but showed gains in the rest of the country led by a 10.9% rise in the South. Construction was up 9.6% in the Midwest and 2.7% in the West.
While home builder confidence took a hit in April, builders' expectations for sales the next six months hit the highest level in six years, the National Association of Home Builders/Wells Fargo Housing Market index showed.
The optimism is largely being driven by the low inventory of homes for sale, mortgage rates that remain near historic lows and rising consumer confidence, says NAHB's chief economist David Crowe.
Still, the comeback for new-home sales and construction will take years, experts say. New home sales should hit 463,000 this year, up from a dismal 366,000 last year, says IHS Global Insight. It doesn't expect sales to climb back to more historically normal levels, above 800,000, until 2015.
Contributing: Associated Press
http://www.usatoday.com/story/money/business/2013/04/16/housing-starts-march/2087107/
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