Richmond Times-Dispatch Weekend
U.S. homebuilding pace rebounds to fastest since 2006
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.