Single-family housing production held virtually unchanged in March as a double-digit decline in the more volatile multifamily sector brought combined nationwide starts activity down 5.8 percent to a seasonally adjusted annual rate of 654,000 units, according to the latest data released by the U.S. Department of Commerce.
"While more consumers appear to be seriously considering a new-home purchase, builders remain very cautious about starting new projects until they see more actual sales materializing," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "At the same time, in places where buyers are ready to go forward with a purchase, access to credit for both builders and buyers and difficulties in obtaining accurate appraisals are persistent challenges that continue to slow that process considerably."
The 5.8 percent decline in overall housing starts in March was mostly due to a 16.9 percent decline on the multifamily side, which brought that sector's annual production pace to 192,000 units, seasonally adjusted. Meanwhile, single-family starts held virtually flat for the month with a 0.2 percent decline to 462,000 units.
Regionally, while the South registered a 15.9 percent decline in combined starts activity in March, the Northeast posted a 32.8 percent gain, the Midwest posted a 1.0 percent increase and the West reported no change in the pace of new housing production for the month.
Permit issuance, which can be an indicator of future building activity, gained 4.5 percent to a seasonally adjusted annual rate of 747,000 units in March—the fastest pace since September of 2008. This gain was due to a 20.8 percent increase on the multifamily side to 285,000 units, while single-family permit issuance declined 3.5 percent to 462,000 units.
Regionally, permit issuance gained 23.4 percent in the West, 1.7 percent in the Midwest and 0.3 percent in the South, but fell 6.0 percent in the Northeast this March.
"While combined U.S. housing starts lost some ground in March, this was almost entirely due to typical month-to-month volatility on the multifamily side," said NAHB Chief Economist David Crowe. "The fact is that single-family and multifamily starts and permits were all stronger in the first quarter of 2012 than they were in the fourth quarter of 2011, indicating that the market continues to slowly strengthen, albeit in fits and starts."
