The National Association of Home Builders is somewhat encouraged by the 7.2% increase in housing starts for March.
Coming on the heels of disappointing declines in February, March results released by the Department of Commerce showed gains in both the single- and multi-family sectors, and was mirrored by substantial improvements in building permit issuance for the same period.
"While the overall rate of new-home production remains quite low and is still being weighed down by significant uncertainties among both home builders and buyers, this latest report is encouraging," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "It means that some builders are cautiously beginning to re-stock their extremely thin inventories of new homes in anticipation of gradual improvement in consumer demand as the economy slowly inches toward recovery."
"The modest improvement in new-home production and permitting in March is in line with our forecasts for incremental gains through the spring buying season," said NAHB chief economist David Crowe. "While our builder members continue to experience a great number of challenges with regard to competition from foreclosed and short-sale properties, low appraisal values and tight credit conditions, they have noted slight improvements in interest among qualified buyers, and they need to be ready to meet the demand as it materializes."
Gains in new-home production were seen across the board in March, with upward movement registered in both the single- and multi-family sectors, as well as three out of four regions. On the single-family side, a 7.7% gain to a seasonally adjusted annual rate of 422,000 units partially offset a big decline in the previous month. Multi-family starts also gained back a portion of the ground they lost earlier, with a 5.8% increase to 127,000 units.