Housing starts increased 19.4 percent in March amid strong buyer demand, according to a new report released by the US Department of Housing and Urban Development and the US Census Bureau.
Overall housing starts totaled 1.74 million units – the fastest pace for combined single-family and multifamily construction since June 2006.
“Builder confidence remains strong, pointing to gains for single-family construction in 2021,” said Chuck Fowke, chairman of the National Association of Home Builders. “However, rising costs for most kinds of building materials continue to impede positive additional momentum in the market.”
On a regional basis compared to the previous month, combined single-family and multifamily starts are 64 percent higher in the Northeast, 122.8 percent higher in the Midwest, 13.5 percent higher in the South and 13.6 percent lower in the West. The gain in the Midwest is likely weather-related, NAHB said.
“Demand remains solid due to low mortgage interest rates and a thin level of inventory in the resale market, which is spurring the need for additional supply,” said NAHB Chief Economist Robert Dietz. “The test for the industry this year will be balancing growth and higher construction costs, given ongoing housing affordability challenges.”