US Housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units in March, the highest level since June 2006.
Starts soared 37% on a year-on-year basis in March. Homebuilding slumped in February as large parts of the country reeled from unseasonably cold weather, including winter storms in Texas and other parts of the densely populated South region.
Groundbreaking activity increased in the Northeast, Midwest and South, but fell in the West. Permits for future home building rose 2.7% to a rate of 1.766 million units last month, recouping only a fraction of February”s 8.8% plunge. They jumped 30.2% compared to March 2020.
The sharp rebound reported by the US Department of Commerce added to robust retail sales in March in suggesting that the economy was roaring after a brief weather-related setback in February. Increasing COVID19 vaccinations, warmer weather and massive fiscal stimulus are driving the economy, with growth this year expected to be the strongest in nearly four decades.
However, soaring softwood lumber prices amid supply constraints could limit builders” capacity to boost production and ease a shortage of homes that is threatening to slow housing market momentum.
Canadian housing starts jumped to the highest level in more than four decades as developers seek to take advantage of a hot real estate market.
Builders started work on an annualized 335,200 units last month, a jump of 22% from February”s already elevated levels, according to Canada Mortgage and Housing Corp.
That beats economist predictions for a 255,000 increase and was the highest monthly total since at least 1977. The gain was led by construction of multi-family dwellings like condos.
US existing home sales fell to a seven-month low in March, pulled down by an acute shortage of properties, which is boosting prices and making owning a house more expensive for some first-time buyers.
Existing home sales dropped 3.7% to a seasonally adjusted annual rate of 6.01 million units last month, the lowest level since August 2020 according to the National Association of Realtors. Sales fell in all four regions.
Existing home sales, which are counted at the closing of a contract, lag signings by a month or two. That means part of the drop in sales last month was due to harsh weather in February. Home resales, which account for the bulk of US home sales, increased 12.3% on a year-on-year basis, remaining well above their pre-pandemic level.
The housing market is experiencing a dearth of properties available for sale in the wake of strong demand for bigger and more expensive accommodations as the COVID-19 pandemic forced millions of Americans to work from home attend school remotely. Though homebuilders have stepped up new home construction, they are grappling with record-high lumber prices as well as shortages of land and workers.