In order to relieve the inventory shortage in America, the National Association of Realtors has said repeatedly that the most needed solution is the engine of new home construction starting back up again. March data from the U.S. Census Bureau offers mixed signals – while housing starts dropped 8.8 percent and permits hit their lowest point in a year, the 12-month rolling total of starts actually grew 13 percent year-over-year.
The Bureau reports starts at the lowest level since October, and economists projected a 1.17 million unit pace, yet March fell short at only 1.09 million units.
More mixed signals
Trulia Chief Economist, Dr. Ralph McLaughlin, notes that the 12-month rolling total “a more statistically robust measure of trends in housing start data,” and in March, that total “grew impressively,” adding that April 2015 – March 2016 “represents the best 12-month span for starts since August 2007.”
Although Dr. McLaughlin points out that the number of jobs per new housing starts are rebounding, we would add that in March, the dollar fell considerably.
Single family isn’t dragging the average down
Combining multifamily and single family data, groundbreaking improved a bit in the Northeast, but the national average was drug down by a dramatic 21.2 percent dip in the Midwest and a 4.9 percent drop in the South.
Separated, multifamily starts fell 7.9 percent, while single family starts hit their highest level since October 2007. Also separated out, multifamily permits plummeted 18.6 percent, while single family home permits only dropped 1.2 percent in March. Clearly, multifamily is playing a tremendous role in dragging down the national average, but single family home starts aren’t exactly skyrocketing.
Yet construction jobs are way up
And finally, construction jobs per start has hit the 15-year average, marking the best month since November 2008.
Dr. McLaughlin notes, “This is due to the recent increase in single-family starts, which uses more workers per unit built than multifamily starts.”
He concludes that “As the share of multifamily starts decreases, we should expect this number to increase in the months ahead as more labor intensive single-family starts to pick up.”