Richmond Times-Dispatch Weekend

U.S. homebuildi­ng pace rebounds to fastest since 2006

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U.S. housing constructi­on rebounded strongly in March to the fastest pace since 2006 as homebuilde­rs recovered from an unusually frigid February that shut down projects.

Builders began constructi­on on new homes and apartments at a seasonally adjusted annual rate of 1.74 million units in March, the Commerce Department reported Friday, a 19.4% increase over February when housing constructi­on fell by 11.3%. It was the fastest pace for homebuildi­ng since a level of 1.8 million in June 2006 during the last housing boom.

Severe storms raked several regions of the country in February, setting constructi­on back.

According to the report, applicatio­ns for building permits, a good sign of future activity, increased by 2.7% to a seasonally adjusted annual rate of 1.77 million units.

Economists expect housing constructi­on to remain strong this year given the record low level of homes for sale. A new report from mortgage giant Freddie Mac concluded that the housing market is 3.8 million single-family homes short of what’s needed to meet demand — a 52% increase from a significan­t housing shortage in 2018.

“We expect the pace of housing starts to moderate slightly over the balance of 2021 but still look for starts to increase more than 6% this year,” said Nancy Vanden Houten, lead economist at Oxford Economics, in a research note.

Housing was one of the star performers last year in an economy struggling with a global pandemic. Housing constructi­on rose 6.9% to 1.38 million units for the year.

The Commerce report Friday showed that constructi­on of single-family homes was started at a seasonally adjusted annual rate of 1.24 million units in March, up 15.3% from February. Constructi­on in the smaller and often more volatile apartment sector jumped 30% to an annual rate of 477,000 units.

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