WASHINGTON (MNI) - The U.S. March housing data were disappointing because they show only modest rebound from the winter and a stalling at around the minimal level of household formations of 1 million, but they still suggest a growing housing market.
March housing starts posted +2.8% to 946,000 units, and permits posted a -2.4% correction to 990,000. Both are below expectations in a Market News International poll of economists, but the fact that permits remain above starts suggests rising housing construction ahead.
Starts masked a decent +6% in single-families to 635,000, probably reflecting a weather rebound. The largest double-digit gains were in the Northeast and Midwest, though the West also posted +2.3% for single starts.
Multi-unit (5+ units) starts were down 6.1% after a surge at the end of 2013. These appear most sensitive to financial conditions.
Permits were strongest at +21.7% in 2-4 units, but 1-families weakened in the South and West. Permits for 1-families are running at a 592,00 pace, steadying after last year's advance. Permits in the Northeast stood at their highest since June 2008, mainly because of better permits for multi-unit buildings.
Overall, the data are disappointing and suggest housing remains constrained at higher levels as rates rise.
March completions edged down 0.2% to 872,000, but this is 7.7% above last year at this time, illustrating that housing growth will continue to support the economy. Units under construction in 5+ unit buildings were 374,000, a high since Jan. 2009.
