Builders Step Up Construction Due to Rising Demand
Homebuilders broke ground on homes in March at the fastest pace since June 2008, mostly fueled by a surge in apartment construction, the Commerce Department reports. Housing starts rose 7 percent in March from February, reaching the seasonally adjusted rate of 1.04 million.
Homebuilders have ramped up production as buyers rush to take advantage of continued housing affordability due to low mortgage rates.
The pace of homebuilding in March was nearly 46 percent higher compared to the same time last year.
Apartment construction led housing starts in March, soaring 31.1 percent, while single-family home construction dropped 4.8 percent.
The recent data “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,” says Rick Judson, chairman of the National Association of Home Builders. “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.”
Regionally, housing starts dropped 5.8 percent in the Northeast. However, the rest of the country showed strong gains, including a 10.9 percent increase in the South, 9.6 percent gain in the Midwest, and a 2.7 percent rise in the West.
Building permits — a gauge for future home construction — fell 3.9 percent in March, after having reached a five-year high in February.