New Home Construction in March Surges to Highest Level in 7 Years

Residential construction shot up significantly in March as homebuilders broke ground on the most multi-family homes in seven years, a report from the Commerce Department showed Tuesday.

Housing starts rose 7 percent from upwardly revised levels reported in February to a seasonally adjusted annual rate of about 1.04 million units, according to the Commerce Department, almost 47 percent higher than levels reported in March 2012.

Construction activity significantly outpaced projections from economists polled by Bloomberg, which put starts closer to 930,000. Starts reported in March also inched toward what economists consider a more normal level of about 1.5 million annual starts.

Builders are scrambling to respond to heightened demand for rental units, which has been credited with most of the gains seen in the housing starts in recent months and boosting broader economic growth.

"Today's report is a reflection of the solid demand that many areas are seeing for rental apartments as young people take that first step into the housing market, which is a very positive development," Rick Judson, chairman of the National Association of Home Builders and a Charlotte, N.C.-based home builder, said in a statement.

But work began on fewer single-family homes in March and permit levels pulled back, making the data a "mixed bag" according to NAHB Chief economist David Crowe, who characterized gains in the homebuilding sector "a continuation of the slow, methodical march forward."

John Tashjian, principal at New York-based Centurion Real Estate partners, says the rift between multi-family and single-family building also exposes the growing divide between the recovery of specific markets versus the broader housing market.

My conclusion that this multi-family expansion is mainly due to Section 8 Housing, the name eschewed by the government in favor of ‘housing vouchers’...
It is the modern day replacement for LBJs Great Society aftermath where the government made every local in the country create ‘government housing’ - the projects.
These projects - public housing - have largely been abandoned to more effectively disperse the lowlifes to where worthwhile people live. The tenant pays 25% of their spendable income (not a whole hell of a lot for a loser on EBT, TANF, EITC, WICs, etc. - not taxable and doesn’t count), the government picks up the rest of the rent.

Obama has upped the ante, and just created more public housing, but we can’t call it that...the single family housing recovery IS NOT.

Ahhh, it is a relief to encounter another individual with the correct interpretation of things. More correct you could not be.

As we allow the section 8 recipients to fan out into the suburbs (in the name of equality and equal opportunity, of course), leaving behind the smoldering ruins of rundown apartment complexes in the urban areas, we are merely handing off the older suburban complexes to the new wave of entitlement recipients. The working class flee to the newer and more refined locales to escape the influx of urban refugees. It is a cycle that has been repeating for the past 50 years and will continue - the cost just increases with each turn.

“Residential construction shot up significantly in March as homebuilders broke ground on the most multi-family homes in seven years, a report from the Commerce Department showed Tuesday.”.........”Builders are scrambling to respond to heightened demand for rental units, which has been credited with most of the gains seen in the housing starts in recent months.....”

Translation: Minus very good job growth, willingness to buy single family homes is not growing much (less costly to end a one or two year lease than risk forecslosure on a 30 year mortgage), so more people looking for a residence are more willing to rent than buy, which signals capital investors not to invest to build homes, they’re investing in building apartments.

But existing home sales are also seeing a lot of investor buying to rent over primary residence buyers in many markets.

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