Homebuilders continued a slow ramp-up in new single-family construction projects last month, but the number of new projects remained near the lowest levels since mid-2020.
Privately owned single-family starts in March rose to a seasonally adjusted annual rate of 861,000, up 2.7 percent from the previous month, according to data released Tuesday by the U.S. Census Bureau.
Still, despite that second consecutive month of growth in single-family starts, that number was nearly 28 percent lower than the same time in 2022 following a year of higher mortgage rates that tanked transaction volumes and sent home prices downward across much of the U.S.
The homebuilding sector appears to be holding steady in the face of significant challenges that persist for construction companies, Danushka Nanayakkara-Skillington wrote on the National Association of Home Builders’ website.
“Single-family production showed signs of a gradual upturn in March as stabilizing mortgage rates and limited existing inventory helped to offset stubbornly high construction costs, building labor shortages and tightening credit conditions,” wrote Nanayakkara-Skillington, NAHB’s vice president for forecasting and analysis. “This is reflected in the slight uptick in builder sentiment in April.”
Including a reduction in new multifamily construction projects, the total number of privately owned housing starts declined by 0.8 percent from February to March. It ended up at a seasonally adjusted annual rate of 1.4 million units — down 17 percent year over year.
Even as the number of new projects continued to run slow, builders were completing older jobs at a fast pace.
The number of privately owned housing completions dipped slightly to a seasonally adjusted annual rate of 1.5 million in March, which was still 12.9 percent higher than at the same time last year.
That 0.6 monthly decline in completed projects would have been deeper if not for a 2.4 percent increase in single-family completions from February to March.