Housing Starts
Housing Starts, Permits
Rose 0.8% in March
By Rex Nutting
From MarketWatch
Boosted by
warmer weather, construction of new homes increased 0.8% in March to a
seasonally adjusted annual rate of 1.518 million, the highest level this
year, the Commerce Department estimated Tuesday.
Building
permits also increased 0.8% in March to a seasonally adjusted annual rate
of 1.544 million.
The figures
were slightly higher than expected by economists surveyed by MarketWatch.
The median estimate for housing starts was 1.50 million, while permits
were expected to be at 1.52 million.
Housing starts
are down 23% from March 2006, while permits are off 26%.
The figures
could show renewed optimism on the part of builders that they've seen the
worst of the correction in the housing market. But the month-to-month
figures are too unreliable to make firm judgments based on one month.
On Monday, the
National Association of Home Builders reported that builder optimism sank
in April, with builders warning that tighter lending standards for
subprime loans could prolong the slump through 2008.
Economists
said that favorable weather in March compared with February probably had a
major impact on construction. While February was colder and wetter than
usual, March was warmer and drier in much of the nation.
Starts in the
Midwest surged 44%, the biggest gain in 16 years. Starts in other regions
fell.
And the
government cautioned that the monthly figures are unreliable. For housing
starts, the standard error is so high that the reported figure could be
off by as much as 11% either way.
It can take up
to five months for a new trend in housing starts to be confirmed in the
data. Over the past five months, starts have averaged 1.52 million
annualized, about the same as in the five months ending in February.
Completions of
new homes fell 0.7% to a seasonally adjusted annual rate of 1.63 million,
an indication that builders are ramping down their inventories. It's the
lowest number of completions since August 2003. It takes about 6 months
for a home to go from groundbreaking to completion.
There were 1.2
million homes under construction in March, down 16% from the previous
March.
Starts of
single-family homes increased 2% in March to a seasonally adjusted annual
rate of 1.22 million. Permits for single-family homes rose 1.4% to 1.11
million annualized.
In a separate
report, the Labor Department reported that consumer prices rose 0.6% in
March, while core prices rose just 0.1%. Both figures were below
expectation.
-- Rex Nutting is Washington bureau chief of MarketWatch
