March Residential Construction Data Stronger Than It Looks

Single-family housing starts fell nearly 5% in March from the prior month as construction activity remained at 2008 levels.

The Census Bureau reported Tuesday that single-family starts fell to a 619,000 seasonally adjusted annual rate in March from a 650,000 rate in February.

But there was a “whopping” re-estimate of the February start rate, which pushed the number up by 32,000 single-family units.

“The drop in single-family starts is not worrisome since builders are reporting strong demand—it’s roadblocks that are keeping them from starting as many homes as they would like to,” said IHS Global Insight economist Patrick Newport.

Overall, single-family starts are up nearly 29% from a year ago and completed homes are up nearly 35% from a year ago.

Builders completed construction of single-family homes at a 593,000 seasonally adjusted annual rate annual in March—which is the highest completion rate since December 2008—except for a one-month spike in June 2010.

“This statistic bears watching going forward since a completed home increases inventory, which is tight and tightening,” Newport said.

Meanwhile, multifamily starts jumped 27% in March to a 392,000 seasonally adjusted annual rate. That pushed total housing starts above the 1 million mark for the first time since June 2008.