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Home Building Hits 5-Year High

Thursday, April 18, 2013

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The U.S. residential construction industry may be crawling, slowly but surely, out if its post-recession funk.

U.S. housing starts have reached their highest level in almost five years, driven by a robust multi-family building sector, according to the latest Department of Commerce report released Tuesday (April 16).

Housing graph

The U.S. Department of Commerce's March report points to a continued trend toward recovery.

Housing starts rose 7 percent from revised February figures, to a seasonally adjusted annual rate of 1,036,000—the highest rate since June 2008. The rate was 46.7 percent higher than a year ago, according to the report.

The jump represents the largest year-over-year growth since 1992, economists say.

The department revised its February starts to an annual rate of 968,000 from 917,000.

Multi Boom, Single Struggle

The gains were uneven, however, in housing types and regions.

Starts of multi-family structures with at least five units increased by 26.9 percent to an annual rate of 392,000 from February, while single-family housing starts dropped 4.8 percent to 619,000, the report said.

Regionally, starts in March rose 10.9 percent in the South; 9.6 percent in the Midwest; and 2.7 percent in the West. However, starts fell 5.8 percent in the Northeast.

Permits Dip

Meanwhile, building permits—an indicator of future construction—dropped 3.9 percent to an annual rate of 902,000, from the revised February rate, but they are up 17.3 percent from a year earlier.

NAHB
NAHB

The National Association of Home Builders says Tuesday’s report is a “mixed bag” due to the opposite direction of single- and multifamily starts and a somewhat weaker amount of permits.

In contrast to the regional starts report, the Northeast was the only part of the country to pull in more permits in March, with a 24.7 percent increase to 101,000 units. Meanwhile, the Midwest, South and West posted declines of 2.1 percent, 6.2 percent and 10.4 percent, respectively.

‘Mixed Bag’

In a statement, the National Association of Home Builders called Tuesday’s data a “mixed bag” due to the opposite direction of single- and multifamily starts and a somewhat weaker amount of permits.

The numbers indicate “a continuation of the slow, methodical march forward” that characterizes the housing recovery, said NAHB Chief Economist David Crowe.

Citing recent builder-confidence surveys, NAHB said the numbers reflect the fact that “single-family builders are experiencing some difficulties in keeping up with rising demand for new homes due to increasing construction costs and other factors.”

New residential construction data for April 2013 is scheduled for release May 16.

Construction Upswing in Jobs Report

The rate of construction job growth is also trending upward, according to the Labor Department’s latest release.

The construction sector added 18,000 jobs in March, the report said. “Over the past six months, job growth has averaged 28,000 per month, compared to an average of 10,000 per month from February 2011 to September 2012,” the report noted.

In the last two years, construction has added 317,000 jobs to the economy, with more than half of that increase occurring in the last six months, the White House said in a statement on the jobs report. 

Employment in specialty trade contractors rose by 23,000 in March, the Labor Department noted.

Within the industry, residential specialty trade contractors added 13,000 jobs. Over the last six months, specialty trade contractors have added 128,000 jobs.

The employment situation for April 2013 is scheduled for release May 3.

   

Tagged categories: Construction; Economy; Home builders; Housing; Housing starts; National Association of Home Builders (NAHB); Residential Construction; U.S. Bureau of Labor Statistics

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