Home builders are taking it slow this spring, according to new figures on housing construction.
Permits for new construction fell 5.7% in March compared to last month, the Commerce Department reported. Housing starts -- when construction actually begins -- climbed 2% off last month’s sharp decline, but came in well below analyst expectations.
The often-volatile numbers were dragged down by a decline in multifamily construction, a sign that the apartment building boom of the last couple of years may be cooling off. Starts for buildings with five or more units fell 7.1% from February, while permits, a sign of construction to come, were down 16%.
But single-family builders, the bigger chunk of the market in most of the country, aren’t quite picking up the slack, with activity up only a bit despite near record-low interest rates, an improving job picture and a housing market that’s generally stable.
“The housing market recovery continues, although it remains disappointing,” said PNC chief economist Stuart Hoffman in a research note. “Single-family starts in particular are soft.”
And some economists warn that lack of new supply could hamper the market this spring, especially in places like Southern California where inventory is already tight. As buyers shop for houses and find them sparse, some market-watchers say, they’ll either bail out or drive prices up again.
Keep an eye on housing and real estate in Southern California. Follow me on Twitter at @bytimlogan