Housing permits’ meteoric rise
The U.S. Commerce Department today reports that in March, building permits which are a leading economic indicator predicting future housing starts, rose 11.2% nationally with multifamily permits rising 25% and single family homes rising 6%.
The West rose 37% in permit volume, the Midwest rose 7%, the South 6% and the Northeast remained unchanged.
This could explain why builder sentiment is rising despite historically low sales, starts and permits this spring.
Housing starts rise as well
Nationally, housing starts rose 7% with over half a million homes breaking ground. This is a huge shift from a devastating, historically bad February.
Single family home starts increased 8% and multifamily starts rose 6%, both of which will likely be higher in April’s data given the surge in permit issuance for the period.
Housing starts in the Midwest rose 32%, in the West 28%, and even in the Northeast who saw unchanged permit apps, starts rose 5.4%. The South continues to decline in starts, however, with a 3% dip during March.
NAHB weighs in
“While the overall rate of new-home production remains quite low and is still being weighed down by significant uncertainties among both home builders and buyers, this latest report is encouraging,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “It means that some builders are cautiously beginning to re-stock their extremely thin inventories of new homes in anticipation of gradual improvement in consumer demand as the economy slowly inches toward recovery.”