Housing construction passed the psychological mark of one million starts in March coming in at 1.036 million homes, up 7 percent from an upwardly revised February level of 968,000. The surge was due to a 31 percent increase in apartment construction to a level of 417,000 units, the highest since January 2006. Single-family construction fell 4.8 percent to 619,000 from an upwardly revised February level, which was the highest since May 2008. The first quarter single-family average was 628,000 up 6 percent from the fourth quarter 2012.
Housing permits were down 3.9 percent but from a February high not seen since July 2008. The first quarter average was 915,000 up 2.6 percent from the fourth quarter. Builders were stock pilling permits in February and the inventory of unused permits dropped 9 percent in March as a replacement for drawing more permits. Single-family permits were virtually unchanged so the change was due to a 10 percent drop in apartment permits likely because we are approaching the sustainable level of apartment construction.
Regionally, starts were up in all regions except the Northeast, which was down 5.8 percent monthly but up 12.6 percent annually. Midwest starts were up 9.6 percent month-to-month and 28.4 percent from March 2012. The South was up 10.9 percent monthly and 58.2 percent annually and the West was up 2.7 percent monthly and 53.7 percent annually.
The mixed results were in line with NAHB expectations for 975,000 starts in 2013 or a 25 percent improvement over 2012.