Economists' Outlook

Housing stats and analysis from NAR's research experts.

Daily Economic Update: Housing Starts, Construction

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights housing starts and construction.

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    The Census Bureau released monthly figures for housing starts this morning.  The seasonally adjusted figure for March rose 7.2% from a month earlier to 549,000 units.  This increase followed an 18.5% decline in the prior month.
  • Both the single-family and multi-family sectors improved growing 7.7% and 5.8%, respectively.  Single family starts were 422,000 in March, roughly 74% lower than the 1.601 million starts recorded in March of 2006.  Total permits rose 11.2% which bodes well for starts in the future, but projects authorized, but not started grew by 7.1% suggesting that builders are still holding back.  Builder confidence slipped in April as reported yesterday by the NAHB.  This decline in confidence was concentrated in the South where distressed sales are high.
  • Construction was an important source of both income and job growth during most of the recent economic expansions.  The large reserve of foreclosed properties which sell for less than new construction has hamstrung this sector’s recovery.  While lagging construction weighs on employment growth it limits new supply to the market at a time when the housing market is working to absorb an oversupply of distressed properties.
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