– Housing starts jumped by 7.0% to an annualized pace of 1,036,000 units in March 2013, handily beating market expectations for a reading of 930,000 units.
– Building permits declined by 3.9% in March to an annualized 902,000, which was weaker than market expectations for a reading of 942,000 in the month.
Privately owned housing starts in the US jumped by 7.0% to an annualized pace of 1,036,000 units in March 2013, handily beating market expectations for a reading of 930,000. This solid monthly increase in starts followed the upwardly revised 7.3% rise recorded in February to 968,000 annualized units (initially reported as 917,000) and represented the highest level of new home construction since June 2008.
The acceleration in the pace of the new home construction in March reflected a surge in multiple-unit construction (up 31.1% to 417,000, which is the highest level since January 2006) that built on the previous month’s upwardly revised 11.2% jump (up to 318,000 from the previously reported 299,000). In contrast, single-unit starts declined (-4.8% to 619,000) to reverse most of February’s upwardly revised rise to 650,000 (initially reported as 618,000) that had represented the highest level since May 2008. Gains were recorded in the South (10.9%), Midwest (9.6%), and West (2.7%) while a pullback in single-unit starts drove a decline in the Northeast (-5.8%).
The number of building permits issued decreased in March by falling 3.9% to 902,000 annualized units to reverse the previous month’s like-sized rise completely. The decline in March reflected a 10.0% drop in permits for multiple-unit residences (to 307,000) while permits for single-unit homes fell by a modest 0.5% in the month (to 595,000).
After providing a negative contribution to growth for six consecutive years, the US housing sector was a key support to the overall economy in 2012 and that upward trajectory has carried into 2013, with the 969,000 annualized starts in the first quarter of 2013 representing a 7.2% increase over the previous quarter and the highest level since the second quarter of 2008. We anticipate that this momentum will continue throughout the remainder of this year and into 2014 as the residential real estate market continues to normalize, with starts nearing their longer-term average of 1,400,000 annualized units by the end of next year.
RBC