Housing starts slide in March
Following a boom month for residential construction in February, housing starts in March fell 14.7 percent to a seasonally adjusted annual rate of 1,321,000.
On a monthly basis, single-family starts declined 12.4 percent to a rate of 1.022 million, according to government data released Tuesday. Single-family starts are up 21.2 percent compared to the year-ago figure of 843,000.
The chart of residential construction by region (below) shows significant variation in activity among the four regions. On one extreme, single-family starts in the West were up 80.5 percent compared to a year ago. On the other extreme, total starts in the Northeast were down 56.8 percent.
High interest rates factored heavily in the nearly 15 percent decline in total housing starts, according to the National Association of Home Builders.
"Builders are grappling on several fronts as the inflation fight continues,” said Carl Harris, chairman of the NAHB, and a custom home builder from Wichita, Kansas. “Higher interest rates are increasing the cost of housing for prospective home buyers and raising the development and construction cost for builders of homes and apartments. At the same time, shelter inflation is rising faster than overall prices due to supply-side challenges.”
Danushka Nanayakkara-Skillington, NAHB's assistant vice president for forecasting and analysis added:
“Single-family starts were down in March as interest rates increased and multifamily production fell as builders faced tighter financing conditions. And with single-family permits also down in March, single-family production will likely decline again in April.”
