National housing starts edged up 0.8% in March as the Midwest region rebounded from a sharp decline in February and posted a 44.5% increase for the month, the Commerce Department reported today. The pace of housing starts for March was a seasonally adjusted annual rate of 1.518 million units, 23.0% below a year earlier.

Construction of new single-family homes, boosted by a 35.9% surge in the Midwest, was up 2.0% in March to a seasonally adjusted annual rate of 1.218 million units. This was 24.6% below a year earlier. Multifamily housing construction decreased 3.8% for the month to a seasonally adjusted annual rate of 300,000 units and was down 16.0% from a year earlier.

“Builders, overall, have been systematically cutting back on new building activity for more than a year now,” said Brian Catalde, president of the National Association of Home Builders (NAHB) and a home builder from Southern California. “This slowdown is enabling them to reduce their inventory and better position themselves for the balance of the year, especially when faced with uncertainties over the impacts of the subprime-related tightening of mortgage lending standards on home sales.”

“This was the second warmest March on record, and the numbers for starts and permits undoubtedly were supported by this factor,” said NAHB Chief Economist David Seiders. “Furthermore, extreme gyrations in the numbers for the Midwest region have obscured underlying trends for several months.”

“Nationally, housing starts for the first quarter of this year were down by 5.5% from the final quarter of 2006 and nearly 30% below the first quarter of last year,” Seiders said.  “NAHB’s forecast shows another modest decline in the second quarter, followed by a gradual recovery beginning around mid-year. We now expect total housing starts for 2007 to be down by 20% from last year.”

Regionally, construction of new homes and apartments in the Northeast, South and West was down by 6.1%, 2.7% and 7.7%, respectively. The 44.5% increase in the Midwest was the first increase the region posted in six months. All four regions reported a pace of construction well below a year earlier.

Permit issuance was up 0.8% for the month to a seasonally adjusted annual pace of 1.544 million units, a level that was 25.9% below a year earlier. Single-family permit issuance was up 1.4% to a pace of 1.114 million units for the month. This was 28.4% below a year earlier. The pace of multifamily permit issuance increased 1.6% to 440,000 units for the month, 17.0% below the March 2006 pace. [ return to top ]