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Housing Starts Slip in March
Permits Also Down

Housing Starts Slip in March

In spite of the less than positive news in the new housing market, the apartment market is reporting strong demands for new and existing units, renewals are mostly running high and vacancy rates remain low.

Showing a lack of forward momentum at the beginning of spring, the latest numbers showed that starts for new housing were off slightly, at -03%, from the previous month's posting. More discouraging than that, permits declined 1.7% following a 2.0% drop in February.

The data on starts has been trending downward of late, as this is the second month in a row, and six of the last seven months, that losses have been registered. Permits are on a three-month losing streak.

Year-to-date totals paint an even dimmer picture as the most recent report shows overall housing starts are at a rate 9.7% under last year's pace in the first three months of the year. In that timeframe, multifamily starts have dropped 18.8% and single-family starts have declined 5.3%.

The Wells Fargo Economics Group stated, "Lower mortgage rates have had only limited success at reviving homebuilding so far in 2019 (but) the slow start to the year may be somewhat weather-related, with milder weather boosting activity in January and the return of more typical weather weighing on starts and permits in February and March."

In a measure of optimism, the group further evaluated that they "doubt homebuilding has lost as much momentum as the first quarter data indicate. Homebuilding confidence has been rebounding and builders' assessments of buyer traffic and their expectations for single-family home sales over the next six months have improved slightly. The rebound in builder optimism still comes up well short of the previous highs, however, suggesting that lower mortgage rates have moderated last year's sharp pullback in home sales and builder expectations, but have not reversed it."

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December 9, 2019, 10:08 am PDT

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