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Housing Starts Advance in March - 4/19/2004 - Mortgage Loan Refinance Debt Equity

Housing Starts Advance in March

Housing starts increased to a seasonably adjusted annual rate of 2.007 million units in March, the Commerce Department reported last week. The pace was 6.4% above February’s upwardly revised rate of 1.887 million units and 15.2% above the March 2003 pace.

"The housing market is being supported by historically low interest rates, rising house values and a strengthening economy," said NAHB President Bobby Rayburn. "Builders remain confident about the market and expect to maintain a healthy pace through the coming months as we strive to keep up with strong demand for single-family homes and condominiums."

"Favorable market conditions continue to bode well for housing," added NAHB Chief Economist David Seiders. "The interest rate structure remains favorable; national, regional and local economies are strengthening; growth of employment and household income is picking up; and household formations are increasing in the process."

"Although interest rates have moved up since the end of March, the strengthening economic and demographic fundamentals will provide strong support to housing demand as the year progresses," he said. "Indeed, NAHB surveys of builders suggest that the initial impact of the rate reversal has been to strengthen, rather than weaken, buyer demand."

Single-family housing starts increased 5.5% in March to a pace of 1.599 million. Reflecting ongoing strength in the condominium market, multifamily production increased 9.7% to a seasonally adjusted rate of 408,000 units.

Starts were up in every region of the country except the Northeast, where they fell 4.9%.

"Builders are positioned quite well. Inventories are lean, there’s a sizeable backlog of unused building permits and buyer demand promises to remain strong," said Seiders. "This environment bodes well for house prices as well as for home sales and production."

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