4/17/2007
Rejis J. Sheehan & Associates
Housing starts and building permits were little changed in March giving futher evidence that a trough has occurred in the housing market downturn, according to Robert Sheehan, consulting economist for the National Apartment Association.
“The rate of starts in March was up a statistically insignificant 0.8 percent, but it was the second consecutive monthly rise,” Sheehan said. “The question now is what is the level of strength of the recovery? There are many issues such as the tightening of standards for sub prime lending, lower household growth, and stronger inflationary pressures that would dictate a slow recovery over the next few months at least.” he added.
The housing starts rate for March was estimated at a 1.518 million unit seasonally adjusted annual rate, according to the U.S. Department of Commerce, versus a downwardly revised 1.506 million unit rate for February. Single-family construction increased 2.0 percent to a 1.218 million unit rate from 1.194 million a month earlier. Apartment (units in structures with 5 or more units) starts dropped 6.8 percent to a 262,000 unit rate from 281,000 in February. Total multifamily construction starts declined 3.8 percent to a 300,000 unit rate in March from the 312,000 unit rate a month earlier.
Housing starts were mixed regionally. They fell 7.7 percent in the West to a 318,000 unit rate; 6.1 percent in the Northeast to a 123,000 unit rate and 2.7 percent in the South to a 784,000 unit annual rate. Starts jumped 44.5 percent in the Midwest to 237,000 unit rate, bringing that region back from two months of severe winter weather-induced lows.
Building permit activity increased 0.8 percent to a 1.544 million unit annual rate in March from the 1.532 million revised rate for February. Single-family permits were up 1.4 percent. Total multifamily permits were essentially unchanged with a 0.7 percent decline, and the apartment component was off 0.8 percent.
Housing starts during the first quarter of this year were down 27.3 percent a total of 360,700 units from the 496,000 units over the same period in 2006. Single-family starts were down 31.7 percent to a 261,300 unit rate from 382,300 units a year earlier. Total multifamily starts fell 21.1 percent to 64,500 units from 81,800 units. Apartment construction in the first quarter of this year declined 22.6 percent to 57,800 units from 74,900 a year ago. Regionally housing starts during the first quarter were down 37.9 percent in the Midwest, 30.6 percent in the West, 28.4 percent in the South and 24.2 percent in the Northeast.