Erik Cavarra takes a look at the Chicago Home Building Market: New home construction is up nearly 47 percent for the year ending in March. Learn more about this and other real estate market trends.
The rate of new home construction jumped nearly 47 percent in the year ending in March to a seasonally adjusted annual rate of 1,036,000, according to real estate market trends reported today by the Commerce Department.
“Soaring production of multifamily apartments pushed nationwide housing starts beyond the million-unit mark for the first time since 2008 in March,” the National Association of Home Builders said in a statement released today. Starts for all new housing rose 7 percent from February to March, but production of single-family homes fell 4.8 percent.
March also saw a decline in new building permits, a forward-looking indicator of real estate market trends. The rate of permits issued fell 3.9 percent from February to March to a seasonally adjusted annual rate of 902,000. Permitting is 17.3 percent above the 769,000 for March 2012.
The latest real estate market trends are a “mixed bag,” revealing diverging trends for single and multi-family home construction, and weaker building permits, David Crowe, chief economist for the NAHB, said in a statement. “The three-month moving average for single-family starts remained unchanged at 628,000 units in March – which is right on pace with NAHB’s forecast for a 25 percent gain in new-home production in 2013.”
The continued housing market recovery has prompted several homebuilder IPOs this year. Click here to learn more.
The NAHB yesterday reported the third monthly decline in home builder confidence due to rising construction costs, difficulty obtaining credit and looming shortages in labor and buildable lots. The NAHB Housing Market Index fell 2 points to 42 from March to April, and remains well below the break-even point of 50, which indicates an equal number of builders view real estate market trends as positive or negative. The index held steady at 47 in January, maintaining a six-year high reached in December.
Builder outlook remains constrained despite a recent acceleration in home price increases. Click here to learn more.
“Today’s report is a reflection of the solid demand that many areas are seeing for rental apartments as young people take that first step into the housing market, which is a very positive development. The numbers are also in keeping with our latest surveys that show single-family builders are experiencing some difficulties in keeping up with rising demand for new homes due to increasing construction costs and other factors,” Rick Judson, chairman of the NAHB, said in a statement interpreting the latest data on real estate market trends.
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