WASHINGTON – The number of building permits issued for private housing increased 0.8 percent last month to a seasonally adjusted 1.544 million units per year from February’s rate of 1.532 million units per year, according to a report today by the U.S. Commerce Department’s Census Bureau and the Department of Housing and Urban Development. But the March rate remained 25.9 percent below the year-ago estimate of 2.08 million units per year.
Single-family permits increased 1.4 percent to a rate of 1.11 million units per year, after falling 3.1 percent in February to a nine-year low.
Housing construction starts edged up 0.8 percent in March to a seasonally adjusted 1.52 million, after rebounding in February to 1.51 million units per year from January’s nine-year low of 1.40 million.
The increase came as a surprise to analysts; a Bloomberg News survey of 65 economists had predicted a 2.0-percent decline, to 1.50 million housing starts per year from February’s previous estimate of 1.52 million.
Total housing starts had surged 9.0 percent in February. Single-family starts, which rose 2.0 percent in March to 1.22 million, had increased 10.3 percent in February.
In the Northeast, housing starts last month fell 6.1 percent to 166,000 – 25.9 percent below their year-ago level – after plunging 29.7 percent in February’s unseasonable cold. But housing permits issued in the region rose 10.6 percent to 156,000 – 25.0 percent fewer than in March 2006 – after falling 26.0 percent in February. The increased activity was seen as a sign the housing slump might be easing. “From here on, demand should continue to move upwards, albeit gradually, and building activity should follow,” Guy Verberne, head of international economics at Fortis Bank Nederland NV in Amsterdam, told Bloomberg News.
Confidence among U.S. builders continued to retreat, however, according to the National Association of Home Builders/Wells Fargo Housing Market Index for April.
The national HMI this month slipped 3 points to 33, after declining 3 points in March from February’s eight-month high of 39. (Fifty is the neutral level; higher levels indicate more builders see sales conditions as good than as poor.) In the Northeast, where confidence was highest, the HMI slipped 1 point to 38.
“The tightening of mortgage lending standards in connection with the subprime crisis has shaken the confidence of both consumers and builders, as reflected in this report,” said NAHB Chief Economist David Seiders.
“Indeed, the unfolding effects of this crisis have compelled NAHB to trim our forecasts of home sales and housing production for both 2007 and 2008,” Seiders said. “While we still expect to see some improvements in housing market activity beginning later this year, the downside risks and uncertainties surrounding that forecast are considerable.”
Additional information, including the six-page New Residential Construction report, is available at www.census.gov/newresconst; the full NAHB builder confidence report can be found at www.nahb.org.
