Builders continued to reduce the pace of new-home construction in March amidst ongoing erosion in the overall economy and credit markets, according to the latest figures released by the U.S. Commerce Department.
Total housing starts fell nearly 12 percent to a seasonally adjusted annual rate of 947,000 units for the month, while single-family starts fell 5.7 percent to a rate of 680,000 units.
“Builders are dramatically limiting starts of new homes in an environment of weak sales and heavy supply, ratcheting down production of single-family units to its slowest pace in 17 years,” noted NAHB President Sandy Dunn, a home builder from Point Pleasant, West Virginia. “We’re doing everything in our power to bring the supply and demand equation back into balance and restore housing to its rightful place as an engine of economic growth.
“But now that we are in a genuine economic recession, there’s no question that more needs to be done at the federal level to support housing, shore up consumer confidence and limit the degree and duration of the economic contraction.”
NAHB’s Chief Economist David Seiders said that although prospective buyers are visiting model homes, most aren’t buying.
“Builders in the field continue to report that prospective buyers are visiting their model homes, but most are either unwilling or unable to go forward with a purchase given the downward trends in employment and home values as well as the tightening of mortgage credit conditions,” he said.
The single-family side of the housing market continued to display persistent and sizeable declines in both new-home starts and permits for new construction in March, with starts down 5.7 percent to 680,000 units and permits down 6.2 percent to 606,000 units. Meanwhile, the multi-family side continued to display extreme month-to-month volatility in starts and permits, with 24.6 percent and 5 percent declines.
Regionally, housing starts were down across the board in March, with an 8.5 percent decline registered in the Northeast, a 21.4 percent decline in the Midwest, a 12.6 percent decline in the South and a 5.7 percent decline in the West.
Permit issuance was mixed by region, with gains of 3.8 percent and 0.4 percent registered for the Northeast and South, respectively, and declines of 10.6 percent and 20 percent registered for the Midwest and West.
Source: National Association of Home Builders.