ConDig (16-Apr-21). Construction of new homes in the US roared up 19.4% in March as the market continues to be underpinned by low interest rates.
Overall housing starts rose to a seasonally adjusted annual rate of 1.74 million units, according to a report from the U.S. Census Bureau. This was the fastest pace for combined single-family and multifamily construction since June 2006.
The overall number included single-family starts that increased 15.3% to a 1.24 million seasonally adjusted annual rate. Single-family starts were up 19.6% in the first quarter of this year compared with the same time period last year.
The multifamily sector, which includes apartment buildings and condos, shot up 30.8% to a 501,000 unit pace.
Overall permits, which are a sign of future construction activity, also increased 2.7% to a 1.77 million unit annualized rate in March. Single-family permits increased 4.6% to a 1.20 million unit rate. But multifamily permits edged down 1.2% to a 567,000 pace.
“Builder confidence remains strong, pointing to gains for single-family construction in 2021,” said Chuck Fowke, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Tampa, Fla.
“However, rising costs for most kinds of building materials continue to impede positive additional momentum in the market.”
The NAHB said the housing market remains supported by low mortgage rates and slender inventory levels in the resale sector. But this continues to be offset by higher construction costs, which remains a challenge for housing affordability.