In the midst of a nationwide inventory shortage, construction rates rose across the board from February to March.
Residential starts rose 19.4 percent to a seasonally adjusted annual rate of 1,739,000, according to a new sales report released Wednesday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. That is also 37 percent more than in March 2020.
“At home construction is booming and housing construction will start in March, at its highest level since June 2006, “NerdWallet’s home and mortgage expert Holden Lewis said in a statement. “The builders are breaking out at a pace that we have not seen since the Great Recession because they know the demand is there. There are not enough existing homes for sale, so buyers are also buying new homes. “
Building permits for new buildings rose 2.7 percent to a seasonally adjusted annual rate of 1,766,000, while housing completion rose 16.6 percent to a seasonally adjusted rate of 1,580,000.
However, a recent report by Freddie Mac found that home builders would need to build 3.8 million single-family homes to meet existing demand.
Construction of single-family homes has increased even further – 15.3 percent for starts, 4.6 percent for permits and 5.3 percent for completions. The numbers reflect the pent-up demand for homes with historically low inventory levels. Many are frustrated with the high prices and competition with buyers making ever higher bids and instead turn to building to get the homes they want.
“An extremely short supply of existing properties for sale combined with still cheap mortgage rates and an improving labor market will continue to support demand for new homes,” said Doug Duncan, chief economist at Fannie Mae, in a statement.
“Our tracking of homebuyer migration patterns also shows that relocation from some larger urban areas to suburban areas continues to be faster than average, which also helps support single family homes construction. Apartment buildings in suburbs construction also benefits from this trend. “
Email Veronika Bondarenko