Housing construction is expected to remain strong throughout the year
WASHINGTON — U.S. housing construction rebounded strongly in March with home builders recovering from an unusually frigid February that shut down projects.
Builders began construction on new homes and apartments at a seasonally adjusted annual rate of 1.74 million units in March, the Commerce Department reported Friday, a 19.4% increase over February when housing construction fell by 11.3%.
Severe storms raked several regions of the country in February, setting construction back.
According to the report, applications for building permits, a good sign of future activity, increased by 2.7% to a seasonally adjusted annual rate of 1.77 million units.
Economists expect housing construction to remain strong this year given the record low level of homes for sale. A new report from mortgage giant Freddie Mac concluded that the housing market is 3.8 million single-family homes short of what’s needed to meet demand — a 52% increase from a significant housing shortage in 2018.
“We expect the pace of housing starts to moderate slightly over the balance of 2021 but still look for starts to increase more than 6% this year,” Nancy Vanden Houten, lead economist at Oxford Economics, said in a research note.