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Housing starts decline in March

Total housing starts fell 0.3 per cent in March to a seasonally adjusted annual rate of 1.14 million units from a downwardly revised reading in February, according to a report from the U.S. Housing and Urban Development and Commerce Department that was delayed due to the partial government shutdown.

The March reading of 1.14 million is the number of housing units builders would begin construction if they kept this pace for the next 12 months. Within this overall number, single-family starts fell 0.4 percent to 785,000 units. The multifamily sector, which includes apartment buildings and condos, remained flat at 354,000.

“Despite signs of stabilization of confidence in the marketplace, housing affordability continues to be a concern as housing construction weakens into March,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn.

“Data in the early months of 2019 show single-family starts are off 5 per cent from this time in 2018, with notable weakness in the Midwest and West,” said NAHB Chief Economist Robert Dietz. “Several factors are negatively affecting the housing market, including excessive regulations, a lack of buildable lots and ongoing labor shortages. Recent declines in mortgage rates should help support the market in future months however.”

Regionally, combined single-family and multifamily starts year to date declined 14.2 per cent in the Northeast, 10.9 percent in the Midwest and 27.1 per cent in the West. Starts posted a 1.5 per cent increase in the South.

Overall permits, which are often a harbinger of future housing production, edged 1.7 per cent lower in March to 1.27 million units. Single-family permits fell 1.1 per cent to an annualized pace of 808,000, while multifamily permits dropped 2.7 per cent to an annual rate of 461,000.

Looking at regional permit data on a year to date basis, permits are down 3.7 per cent in the Midwest, 0.4 per cent in the South and 16.9 per cent in the West. The Northeast remained unchanged.