Housing starts rise as permits fall

Housing starts rise as permits fall

U.S. residential construction starts climbed 10.8% in March from the previous month and were also up 10.8% compared with a year earlier. However, new building permits dropped sharply, declining 10.8% from February and 7.4% year over year, according to the latest data from the Commerce Department—signaling continued caution among developers.

In total, single- and multifamily housing starts reached a seasonally adjusted annual rate of about 1.5 million units, while permits were issued for roughly 1.4 million units.

“Housing starts posted a solid rebound in March, suggesting builders are responding to pockets of improving demand despite ongoing affordability challenges,” said Bill Owens, chairman of the National Association of Home Builders. “However, activity remains sensitive to interest rate movements and construction costs.”

Danushka Nanayakkara-Skillington, the group’s vice president of forecasting and analysis, noted that single-family construction drove much of the monthly increase. “This suggests builders are cautiously ramping up production to address persistent inventory shortages in the resale market,” she said.