U.S. Housing Starts Exceed Forecast on Multifamily Construction


(Bloomberg)—New US home construction increased in February for the first time in six months, led by a surge in starts of multifamily projects and suggesting the housing market may be starting to stabilize.

Residential starts rose 9.8% last month to a 1.45 million annualized rate, the fastest in five months, according to government data released Thursday. The pace of starts exceeded all forecasts in a Bloomberg survey of economists that had a median projection of 1.31 million.

Applications to build, a proxy for future construction, climbed 13.8% to an annualized pace of 1.52 million units, reflecting gains in permits for both single-family and multifamily projects.

The pickup points to signs of budding optimism that the worst of the housing rout may be near. Homebuilder sentiment has increased for three-straight months — following 12 consecutive declines last year — supply chains are normalizing and applications to purchase a home have ticked up.

That said, mortgage rates remain high and may limit any forward momentum in sales. And construction firms are still contending with elevated costs for labor and materials. While recent financial turmoil may push down borrowing costs as Treasury yields fall, it could also lead banks to tighten their lending standards.

Single-family homebuilding increased 1.1% in February, while multifamily construction jumped 24%, the most in nearly two years. Permits for one-family homes increased for the first time in a year. Applications to build multifamily dwellings such as apartments rose to the highest level since July.

Completions Surge

The number of homes completed rose more than 12% to a 1.56 million pace, the fastest since 2007 and led by a jump in multifamily projects.

Before the report, outlays for home construction were seen subtracting from first-quarter gross domestic product, according to the Federal Reserve Bank of Atlanta’s GDPNow estimate. Before the report, the regional Fed bank forecast residential investment to subtract about 0.4 percentage point from GDP.

New- and existing-home sales data for February will be released next week.

© 2023 Bloomberg L.P.


Source link

Related Posts

Money making risky? Options Buying

Option buying can be a risky trading strategy because options are derivative securities that derive their value from the underlying asset. The value of an option depends…

Talk Your Book: How to Buy Treasuries – The Irrelevant Investor

[ad_1] Posted March 20, 2023 by sean Today’s Talk Your Book is brought to you by US Benchmark Series: On today’s show, we spoke with Alex Morris,…

Volatility is Nothing New

[ad_1] Last week Wednesday two year treasury yields closed the day at 5.05%. It was the highest level since the summer of 2006. That’s a pretty juicy…

Consider Spending More Time on Business Management

[ad_1] Succeeding in the financial advising industry requires a unique combination of skills. You have to be analytical, rational and unflappable to develop and maintain investment strategies,…

These Are the Goods – The Irrelevant Investor

[ad_1] Get a Full Investor Curriculum:Join The Book List Every month you’ll receive 3-4 book suggestions–chosen by hand from more than 1,000 books. You’ll also receive an…

RIA Roundup: Carson Group Acquires $500M Baton Rouge RIA

[ad_1] In a slower week for dealmaking among RIAs, Carson Group made its first full acquisition of the year and Buckingham Strategic Wealth announced its third.   In earlier…

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: