Reflecting the growing impact of the COVID-19 pandemic, total housing starts decreased 22.3 percent in March from a downwardly revised February reading to a seasonally adjusted annual rate of 1.22 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. Meanwhile, overall permits declined 6.8 percent to 1.35 million.
The March reading of 1.22 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts decreased 17.5 percent to an 856,000 seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, decreased 31.7 percent to a 360,000 pace.
“Housing has been deemed an essential business in most of the nation, and in the few states where the governors have not acted, we urge them to deem construction as essential,” said Dean Mon, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Shrewsbury, N.J. “Housing can help lead an eventual rebound, as it has done in previous recessions.”
“We expect further declines in housing starts in April, due to the unprecedented decline in builder confidence in our latest member survey,” said NAHB Chief Economist Robert Dietz. “It is worth noting that there are currently 534,000 single-family homes currently under construction and 684,000 apartments. Approximately 90 percent of these single-family units are located in states where home building is deemed as an ‘essential service,’ while 80 percent of apartments are located in such states.”
With respect to regional single-family and apartment construction, compared to a year ago, first quarter home production increased in all regions: 31.9 percent in the Northeast, 23.0 percent in the Midwest, 18.9 percent in the South and 27.1 percent in the West. These increases are due to strong construction data in January and February and weak comparable data at the start of 2019.
Overall permits declined 6.8 percent to a 1.35 million unit annualized rate in March. Single-family permits decreased 12.0 percent to an 884,000 unit rate, while multifamily permits increased 4.9 percent to a 469,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 9.6 percent higher in the Northeast, 8.0 percent higher in the Midwest, 11.3 percent higher in the in the South and 17.0 higher in the West.