By Manuel Gutierrez, Consulting Economist to NKBA
New residential construction remained relatively resilient in March, with new housing starts falling by just 0.8 percent to a 1.42 million unit annual rate. While multifamily housing fell by 5.9 percent, down to a rate of 559 thousand, its decrease was moderated by a 2.7 percent gain in the construction of single family homes, which was up to a rate of 861 thousand. Construction of single family houses was 14 percent lower than the average rate in 2022 of one million, but the pace of multifamily construction was slightly higher than the corresponding average rate of 547 thousand.
- The month over month decline in total housing starts was due to sharp drops in two regions: the Midwest, down by 24 percent, and the West, down by 28 percent. The other two regions posted gains, with the Northeast seeing an increase of 72 percent and the South seeing an increase of 7 percent.
- Housing permits were also down month over month by 8.8 percent to 1.41 million units. Similar to the movement in housing starts, single permits rose by 4.1 percent to 818 thousand, while multifamily permits dropped by 22.1 percent to 595 thousand. Compared to the previous year, housing permits were down by 25 percent, reflecting declines in both single family (down by 30 percent) and multifamily permits (down by 17 percent).
- Year over year, total housing starts were 17 percent lower. While there was a decrease of 28 percent in single family housing starts, this was partially offset by the increase of 6.5 percent in multifamily housing starts. All but one of the regions contributed to the decline in total starts, with the South seeing an increase of 0.2 percent.
- In February, there were 412 thousand unfilled construction jobs — reflecting the ongoing labor shortage that continues to plague builders, preventing them from completing houses in a timely manner. In March, there were 1.67 million houses under construction, which is just 24 thousand fewer units below the all-time highest number reached in December 2022.