Led by a 44.5-percent rebound in the beleaguered Midwest from a sharp decline in February, national housing starts edged up a scant 0.8 percent 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 percent surge in the Midwest, rose 2.0 percent in March to a seasonally adjusted annual rate of 1.218 million units. This was 24.6 percent below the pace of a year earlier. Multifamily housing construction fell 3.8 percent for the month to a seasonally adjusted annual rate of 300,000 units, down 16.0 percent from a year earlier.
"Builders, overall, have been systematically cutting back on new building activity for more than a year now," said National Association of Home Builders 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 percent from the final quarter of 2006 and nearly 30 percent 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 percent from last year."
Regionally, production of new homes and apartments was down in the Northeast, South and West by 6.1 percent, 2.7 percent and 7.7 percent, respectively. The 44.5-percent 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 percent for the month to a seasonally adjusted annual pace of 1.544 million units, 25.9 percent below the level of a year earlier. Single-family permits rose 1.4 percent to 1.114 million units, off 28.4 percent from their year-earlier rate, and multifamily permits increased 1.6 percent to 440,000 units, 17.0 percent below the March 2006 annual rate.