WASHINGTON – US single-family homebuilding increased for a second straight month in March, while permits for future construction surged, offering some glimmers of hope for the depressed housing market ahead of the busy spring selling season.
The improvement in the single-family housing market segment, which was reported by the Commerce Department on Tuesday, likely reflected buyers taking advantage of a retreat in mortgage rates. A survey on Monday showed falling mortgage rates and tight supply of previously owned houses were supporting the new home market.
“Mortgage rates have pulled back from the peaks in October/November, helping to provide a jolt to demand and sales activity,” said Ben Ayers, a senior economist at Nationwide in Columbus, Ohio. “But the environment remains challenging with high input and labor costs for builders and expensive financing options for buyers.”
Single-family housing starts, which account for the bulk of homebuilding, rose 2.7 percent to a seasonally adjusted annual rate of 861,000 units last month. Data for February was revised higher to show single-family homebuilding rising to a rate of 838,000 units instead of the previously reported pace of 830,000 units.
Single-family homebuilding increased 4.4 percent in the Northeast and soared 23.6 percent in the Midwest. It advanced 4.8 percent in the densely populated South, but plunged 16.0 percent in the West. Single-family housing starts dropped 27.7 percent on a year-on-year basis in March.
The Federal Reserve’s aggressive interest rate hikes have pushed the housing market into recession, with residential investment contracting for seven straight quarters, the longest such streak since the collapse of the housing bubble triggered by the 2007-2009 Great Recession.
There are, however, signs the housing market is stabilizing at very depressed levels. The National Association of Home Builders/Wells Fargo Housing Market index climbed to a seven-month high in April. — Reuters
