Housing starts, permits rise as builders rebound
Builders broke ground on more homes in March than anticipated and took out permits at the fastest pace in more than a year, a sign of growing confidence that sales will stabilize.
Housing starts climbed to an annual rate of 626,000 last month, up 1.6 percent from February’s revised 616,000 pace, which was higher than initially estimated, Commerce Department figures showed Friday. Building permits, a sign of future construction, climbed to the highest level since October 2008.
Builders took advantage of milder weather following the February blizzards as they rushed to have properties available for buyers seeking to qualify for a government tax credit that expires at the end of June. The jump in permits signals demand will hold up even as foreclosures climb and the jobless rate hovers near a 26-year high.
“Permits, which are not significantly affected by weather, have been on a strong uptrend, and I think that tells us we are unambiguously seeing an improving trend in housing,” said Richard DeKaser, president of Woodley Park Economics in Washington.
Starts, which last month reached the highest level since November 2008, were forecast to rise to a 610,000 rate from a previously reported 575,000 for February, according to the median projection of economists in a Bloomberg News survey. Estimates ranged from 580,000 to 650,000.
Building permits were forecast to fall to a 625,000 rate during the month from 637,000 in February, according to the median in the Bloomberg survey.
New home construction rose 20 percent in March from the same month last year. Permits were up 34 percent in the 12 months ended in March.
Construction of single-family houses decreased 0.9 percent to a 531,000 rate in March, while permits increased 5.6 percent. Work on multi-family homes, such as townhouses and apartment builders, climbed 19 percent to an annual rate of 95,000.