US apartment construction surges in March
Construction of apartment buildings surged in the United States in March, overwhelming a big drop in work started on single-family homes, according to government data released Tuesday.
The rebound last month after the slight decline in February put housing starts just below January's pace, which was a 15-month high.
Total housing starts rose 1.9 percent in March compared to the prior month, to a 1.32 million annual pace, seasonally adjusted, the Commerce Department said in its monthly report.
That was far higher than the 1.27 million units analysts were expecting, and was driven by construction begun on multi-family units, a volatile segment which surged 16.1 percent in the month.
That increase offset the 3.7 percent drop in building of single-family homes, and put the construction pace nearly 11 percent higher than March 2017.
Building permits for single-family homes -- one of the most closely watched numbers in the monthly report as it is a sign of construction in the pipeline -- also fell 5.5 percent.
Ian Shepherdson of Pantheon Macroeconomics said the weak showing for the single-family segment could point to a trend.
"Single-family accounts for more than two thirds of housing construction so short-term swings in the multi-family numbers can't overwhelm the trend," he said in a client note.
"Construction activity tracks sales. So a sustained rise in housing starts in the near-term is unlikely."
The biggest gains were in the Midwest where housing starts jumped more than 22 percent, which compensated for modest declines in the South and West.
The construction figures are subject to a high degree of uncertainty and officials caution that a trend may take as many as six months to appear.
Data on building permits for projects in the works, which are more reliable, rose 2.5 percent to 1.35 million units, but as with starts this was largely due to a 23 percent spike in permits for multi-unit dwellings.
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