Loading...

Home Construction Slips Again in March, Putting Pinch on Sales Inventory

April 19, 2019 by Dan McCue
Home Construction Slips Again in March, Putting Pinch on Sales Inventory

Home construction declined 0.3 percent in March to a seasonally adjusted annual rate of 1.14 million units, the Commerce Department said Friday.

Within this overall number, single-family starts fell 0.4 percent to 785,000 units. The multifamily sector, which includes apartment buildings and condos, remained flat at 354,000 units.

Housing starts declined sharply last month in the Northeast and Midwest, and edged down slightly in the South. However, they surged in the West, where housing starts were nearly 30 percent higher than a month earlier.

Including Friday’s numbers, housing starts have now fallen 9.7 percent for the year, despite the fact a solid job market suggests there’s increased demand from would-be buyers.

Greg Ugalde, chairman of the National Association of Home Builders and a home builder and developer from Torrington, Conn., said while there may be potential buyers, “housing affordability continues to be a concern.”

Robert Dietz, the association’s chief economist said recent declines in mortgage rates should help. The average 30-year mortgage rates that have drifted down to 4.17 percent after peaking at nearly 5 percent  in November.

But Dietz went on to say the home building industry is also being constrained by “excessive regulations, a lack of buildable lots and ongoing labor shortages.”

Analysts at Credit Suisse released a report on homebuilding Thursday noting that new contracts were 7 percent lower compared to a year ago in March and buyer traffic was down 17 percent.

“We note March’s slowdown is partially attributable to inclement weather including atypical rainfall, snow and cold, which affected the majority of the country for half of the month,” the team wrote. “As such, we remain cautiously optimistic on the strength of the overall selling season.”

In addition, building permits for new single-family homes and apartments — an indicator of future construction activity — fell 1.7 percent to an annual rate of 1.27 million units, suggesting the supply of new homes for sale will remain tight for some time.

Single-family permits fell 1.1 percent to an annualized pace of 808,000 units, while multifamily permits dropped 2.7 percent to an annual rate of 461,000 units.

In other housing-related news, the Joint Center for Housing Studies of Harvard University said Thursday that home improvement repair spending is expected to continue dropping through early next year.

The center forecasts that year-over-year growth in homeowner remodeling expenditure will slow from about 7 percent today to 2.6 percent by the first quarter of 2020.

“Home improvement and repair spending has been in an extended period of above trend growth for several years, due to weak homebuilding, aging homes, and other factors,” said Abbe Will, associate project director in the Remodeling Futures Program at the center. “However, growth in remodeling is expected to fall below the market’s historical average of 5 percent for the first time since 2013.”

In The News

Health

Voting

Economy

Biden Chooses Three for Fed Board, Including First Black Woman

WASHINGTON (AP) — President Joe Biden will nominate three people for the Federal Reserve's Board of Governors, including Sarah Bloom... Read More

WASHINGTON (AP) — President Joe Biden will nominate three people for the Federal Reserve's Board of Governors, including Sarah Bloom Raskin, a former Fed and Treasury official, for the top regulatory slot and Lisa Cook, who would be the first Black woman to serve on the... Read More

Goodbye 'Godsend': Expiration of Child Tax Credits Hits Home

CHARLESTON, W.Va. (AP) — For the first time in half a year, families on Friday are going without a monthly... Read More

CHARLESTON, W.Va. (AP) — For the first time in half a year, families on Friday are going without a monthly deposit from the child tax credit — a program that was intended to be part of President Joe Biden's legacy but has emerged instead as a flash point over who... Read More

U.S. Jobless Claims Rise by 23,000 to 230,000

WASHINGTON (AP) — The number of Americans applying for unemployment benefits rose last week to the highest level since mid-November,... Read More

WASHINGTON (AP) — The number of Americans applying for unemployment benefits rose last week to the highest level since mid-November, but still low by historic standards. U.S. jobless claims climbed by 23,000 last week to 230,000. The four-week moving average, which smooths out week-to-week blips, was... Read More

US Inflation Soared 7% in Past Year, the Most Since 1982

WASHINGTON (AP) — Inflation jumped in December at its fastest year-over-year pace in nearly four decades, surging 7% and raising... Read More

WASHINGTON (AP) — Inflation jumped in December at its fastest year-over-year pace in nearly four decades, surging 7% and raising costs for consumers, offsetting recent wage gains and heightening pressure on President Joe Biden and the Federal Reserve to address what is increasingly Americans’ central economic... Read More

World Economic Forum Warns Cyber Risks Add to Climate Threat

LONDON (AP) — Cybersecurity and space are emerging risks to the global economy, adding to existing challenges posed by climate change and... Read More

LONDON (AP) — Cybersecurity and space are emerging risks to the global economy, adding to existing challenges posed by climate change and the coronavirus pandemic, the World Economic Forum said in a report Tuesday. The Global Risks Report is usually released ahead of the annual elite winter gathering of CEOs and... Read More

US Employers Add 199,000 Jobs as Unemployment Falls to 3.9%

WASHINGTON (AP) — U.S. employers added a modest 199,000 jobs last month while the unemployment rate fell sharply, at a... Read More

WASHINGTON (AP) — U.S. employers added a modest 199,000 jobs last month while the unemployment rate fell sharply, at a time when businesses are struggling to fill jobs with many Americans remaining reluctant to return to the workforce. The Labor Department said Friday that the nation’s... Read More

News From The Well
Exit mobile version