Construction starts on new U.S. home rose 1.9 percent in March to a seasonally adjusted annual rate of 1.319 million homes, according to data from the Commerce Department.
Home starts are now 10.9 percent above the March 2017 rate.
The March growth was fueled by a 16.1-percent jump in multi-family home starts which are up 13.8 percent over the March 2017 total at a rate of 439,000 units.
Single-family starts fell 3.7 percent during the month to a rate of 867,000, but remain 5.2 percent ahead of the year-ago rate.
Building permits, a good barometer of where the housing market is moving, rose 2.5 percent in March to a seasonally adjusted annual rate of 1.354 million. Permits are now 7.5 percent above the March 2017 rate.
Builder confidence in the housing market, measured by the NAHB/Wells Fargo Housing Market Index, remains at a strong level. The April index fell 1 point to a 69. Any reading above a 50 indicates most home builders believe market conditions are good.
“Strong demand for housing is keeping builders optimistic about future market conditions,” NAHB chairman Randy Noel said in a statement. “However, builders are facing supply-side constraints, such as a lack of buildable lots and increasing construction material costs. Tariffs placed on Canadian lumber and other imported products are pushing up prices and hurting housing affordability.”
“Ongoing employment gains, rising wages and favorable demographics should spur demand for single-family homes in the months ahead,” NAHB chief economist Robert Dietz added. “The minor dip in builder confidence this month is likely due to winter weather effects, which may be slowing housing activity in some pockets of the country. As we head into the spring home buying season, we can expect the market to continue to make gains at a gradual pace.”
