The National Association of Home Builders sees multi-family as the force behind housing statistics.
Soaring production of multi-family apartments pushed nationwide housing starts beyond the million-unit mark for the first time since 2008 in March, according to newly released figures from HUD and the U.S. Census Bureau. The data show that total starts activity rose 7.0% for the month due entirely to a 31.1% increase on the multifamily side, while single-family production slipped 4.8% from a number that was revised strongly upward for the previous month.
Yesterday's housing starts report "is a reflection of the solid demand that many areas are seeing for rental apartments as young people take that first step into the housing market, which is a very positive development,” noted Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “The numbers are also in keeping with our latest surveys that show single-family builders are experiencing some difficulties in keeping up with rising demand for new homes due to increasing construction costs and other factors.”
Calling the latest data a “mixed bag” due to the opposite direction of single- and multi-family starts and a somewhat weaker amount of permit issuance, NAHB Chief Economist David Crowe said that nevertheless, the numbers indicate “a continuation of the slow, methodical march forward” that characterizes the housing recovery. He also noted that “The three-month moving average for single-family starts remained unchanged at 628,000 units in March -- which is right on pace with NAHB’s forecast for a 25% gain in new-home production in 2013.”
While single-family starts declined 4.8% to a seasonally adjusted annual rate of 619,000 units in March, this was entirely due to a substantial upward revision to the previous month’s data, without which virtually no change would have been recorded. At the same time, multi-family housing starts surged 31.1% to a seasonally adjusted annual rate of 417,000 units -- their fastest pace since January 2006.
Three out of four regions posted gains in combined single- and multi-family housing production in March, with the Midwest registering a 9.6% increase, the South posting a 10.9% gain and the West noting a 2.7% rise. The Northeast was the lone exception to the rule, with a 5.8% decline.
Following a large gain in the previous month, total permit issuance fell 3.9% to a 902,000-unit rate in March. That decline reflected a 0.5% reduction to 595,000 units on the single-family side and a 10% reduction to 307,000 units on the multi-family side.