New
construction
of
residential
homes
receded
in
March,
and
multifamily
housing
starts
also
declined.

Homebuilder
confidence
also
dwindled
in

April
due
to
elevated

mortgage
rates,
coupled
with
a
stronger-than-expected

inflation
reading.

Privately
owned

housing
starts
fell
to
a
seasonally
adjusted
annual
rate
of
1.321
million
units,
down
14.7%
month
over
month
and
down
4.3%
year
over
year,
according
to
a

report
released
Tuesday
by
the


U.S.
Census
Bureau
and
the


U.S.
Department
of
Housing
and
Urban
Development
(HUD).

Single‐family
housing
starts
in
March
fell
12.4%
to
a
rate
of
1.022
million
units,
while

multifamily
starts
ticked
down
to
290,000
units.
Starts
of
new
single-family
homes
are
up
21.2%
compared
to
a
year
ago;
however,
multifamily
housing
starts
are
down
sharply.  

“Inventory
has
been
a
major
constraint
on
the
housing
market,
and
new
construction
has
been
an
outsized
share
of
the
market,”
Bright
MLS
chief
economist,
Lisa
Sturtevant,
said
in
a
statement.
“With
homebuilding
activity
still
strong,
buyers
are
now
also
seeing
more
listings
of
existing
homes
coming
onto
the
market.
While
overall
inventory
is
still
low
by
historical
standards,
this
spring
and
summer
should
offer
buyers
more
options.
Builders
who
may
have
held
back
on
incentives
or
price
cuts
might
be
looking
for
ways
to
entice
homebuyers
who
are
shopping
[for]
existing
homes.”

In
April,
22%
of
builders
cut
prices,
down
from
24%
in
March
and
36%
in
December
2023.
But
the
average
price
reduction
in
April
held
steady
at
6%
for
the
10th
straight
month.
Meanwhile,
the
use
of
sales
incentives
fell
to
57%
in
April,
down
from
a
share
of
60%
in
March.

“The
March
housing
starts
data
signals
a
loss
of
momentum
for
single-family
construction,
but
perspective
is
important
–
single-family
groundbreaking
is
still
up
21%
compared
with
a
year
ago
and
is
more
than
20%
above
the
five-year
pre-pandemic
average,”
said
Odeta
Kushi,
deputy
chief
economist
at

First
American.

The
rate
at
which
building
permits
were
issued
in
March
also
dropped.
It
fell
by
4.3%
month
over
month
to
a
seasonally
adjusted
annual
rate
of
1.458
million.
It
was
still
up
by
1.5%
from
the
same
time
last
year.
Notably,
the
number
of
single-family
authorizations
was
down
5.7%
month
over
month
in
March
to
a
rate
of
973,000
units.
Meanwhile,
multifamily
authorizations
decreased
to
a
rate
of
433,000
units.

Housing
completions
also
dropped
in
March
compared
to
February,
falling
13.5%
to
1.469
million
units.
Single‐family
completions
fell
by
10.5%
between
February
and
March,
to
a
rate
of
947,000.
Meanwhile,
multifamily
completions
came
in
at
a
rate
of
502,000
in
March. 

“​​Housing
starts
surged
in
the
West
in
March,
posting
strong
gains
after
an
anemic
2023,”
Sturtevant
said.
“This
increase
in
new
construction
in
the
western
region
is
a
good
sign
for
home
shoppers
there
who
have
faced
high
prices
and
limited
inventory.”

Despite
the
challenges,
the
new-home
market
will
likely
continue
to
outperform
the
existing-home
market
over
the
near
term,
said
Kushi,
for
one
simple
reason.
“Unlike
existing
homeowners,
builders
are
not
rate
locked-in.”

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