ConDig (16-Apr–24) Construction of new homes in the United States crumbed month-on-month in March as the house building industry continues to battle the crippling effects of spiraling inflation, according to a report from the U.S. Census Bureau.

Overall housing starts nosedived 14.7% in March to a seasonally adjusted annual rate of 1.32 million units, which is the number of housing units builders would begin if development kept this pace for the next 12 months.

Housing permits, which are a sign of future construction activity, also fell 4.3% to a 1.46 million unit annualized rate in March. Single-family permits dropped 5.7% to a 973,000 unit rate, which multifamily permits decreased 1.2% to an annualized 485,000 pace.

“Builders are grappling on several fronts as the inflation fight continues,” said Carl Harris, chairman of the National Association of Home Builders (NAHB).

“Higher interest rates are increasing the cost of housing for prospective home buyers and raising the development and construction cost for builders of homes and apartments. At the same time, shelter inflation is rising faster than overall prices due to supply-side challenges.”

Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis, added that single-family starts were down in March as interest rates increased and multifamily production fell as builders faced tighter financing conditions.

With single-family permits also down in March, NAHB forecasted single-family production to likely decline again in April.