Washington, D.C.—Housing production rebounded in March as buyer demand remains solid due to low mortgage interest rates, according to the National Association of Home Builders (NAHB).
Housing starts increased 19.4% to a seasonally adjusted annual rate of 1.74 million units, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The NAHB said this was the fastest pace for single-family and multi-family construction since June 2006.
According to the NAHB, within the overall number of 1.74 million starts, single-family starts increased 15.3% to a 1.24 million seasonally adjusted annual rate. Single-family starts are up 19.6% when comparing the first quarter of 2021 to the first quarter of 2020. The multi-family sector, including apartment buildings and condos, increased 30.8% to a 501,000 pace.
“Builder confidence remains strong, pointing to gains for single-family construction in 2021,” said Chuck Fowke, chairman, NAHB. “However, rising costs for most kinds of building materials continue to impede positive additional momentum in the market.”
Robert Dietz, chief economist, NAHB added, “Demand remains solid due to low mortgage interest rates and a thin level of inventory in the resale market, which is spurring the need for additional supply. The test for the industry this year will be balancing growth and higher construction costs, given ongoing housing affordability challenges.”
On a regional basis compared to the previous month, combined single-family and multi-family housing starts are 64% higher in the Northeast, 122.8% higher in the Midwest, 13.5% higher in the South and 13.6% lower in the West, according to the NAHB. The gain in the Midwest is likely weather related.
Overall permits increased 2.7% to a 1.77-million-unit annualized rate in March, single-family permits increased 4.6% to a 1.2-million-unit rate and multi-family permits decreased 1.2% to a 567,000 pace, according to the NAHB.