Housing Starts Decline in March

Filed in Economics by on April 19, 2019 2 Comments

Total housing starts fell 0.3% in March to a seasonally adjusted annual rate of 1.14 million units from a downwardly revised reading in February, according to a report from the U.S. Housing and Urban Development and Commerce Department. The report was delayed due to the partial government shutdown earlier this year.

The March reading of 1.14 million is the number of housing units builders would begin construction if they kept this pace for the next 12 months. Within this overall number:

  • Single-family starts fell 0.4% to 785,000 units.
  • Multifamily starts remained flat at 354,000.

“Despite signs of stabilization of confidence in the marketplace, housing affordability continues to be a concern as housing construction weakened into March,” said Greg Ugalde, NAHB chairman and a home builder and developer from Torrington, Conn.

“Data in the early months of 2019 show single-family starts are off 5% from this time in 2018, with notable weakness in the Midwest and West,” said NAHB Chief Economist Robert Dietz. “Several factors are negatively affecting the housing market, including excessive regulations, a lack of buildable lots and ongoing labor shortages. Recent declines in mortgage rates should help support the market in future months however.”

Regionally, combined single-family and multifamily starts year to date declined 14.2% in the Northeast, 10.9% in the Midwest and 27.1% in the West. Starts posted a 1.5% increase in the South.

Overall permits, which are often a harbinger of future housing production, edged 1.7% lower in March to 1.27 million units:

  • Single-family permits fell 1.1% to an annualized pace of 808,000.
  • Multifamily permits dropped 2.7% to an annual rate of 461,000.

Looking at regional permit data on a year-to-date basis, permits are down 3.7% in the Midwest, 0.4% in the South and 16.9% in in the West. The Northeast remained unchanged.

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Comments (2)

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  1. John Bitely says:

    Excessive regulations are creating the lack of buildable lots and intern that is creating the lack of affordable housing. We as builders can’t over come society demanding more regulation and NIMBY anymore. Society must pay for their demands.

  2. In 1940, the median home value in the U.S. was just $2,938. In 1980, it was $47,200, and by 2000, it had risen to $119,600. Even adjusted for inflation, the median home price in 1940 would only have been $30,600 in 2000 dollars, according to data from the U.S. Census.

    Here’s how much the median home value in the U.S. has changed between 1940 and 2000:

    1940: $2,938 (average salary was about $900 a year, fyi: most homes were paid off in about 5-7 years. )
    1950: $7,354
    1960: $11,900
    1970: $17,000
    1980: $47,200
    1990: $79,100
    2000: $119,600

    Here are those values again, adjusted for the inflation rate as of the year 2000:

    1940: $30,600
    1950: $44,600
    1960: $58,600
    1970: $65,600
    1980: $93,400
    1990: $101,100
    2000: $119,600

    But the current median home price in the U.S. is closer to $200,000. So, since the 40’s, we’ve gone from being able (at median prices and median wages) to fully pay homes off in under 10 years to now taking 30+.

    IMHO the problem of housing is related to suppressed U.S. wages. More and more major companies have slashed full-time positions to only use part-time ones, which save companies a boatload of money but mean that the average U.S. household is stretched thinner and thinner by the year. If something doesn’t change, this problem will only worsen in the future.

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