The U.S. housing market continues to rebound, with single-family housing starts inching up 7.2 percent, their highest level since November, 2007, according to the U.S. Census Bureau and the Department of Housing and Urban Development. In February, builders started production on 1,178,000 homes, a 5.2 percent increase over January and a 30.9 percent increase from February 2015. Single-family home completions also increased, rising 6.1 percent to a 736,000 annualized rate, the highest peak since November 2008.
“A rise in housing starts this month shows signs of an early spring bloom for home-building,” says Quicken Loans Vice President Bill Banfield. It is encouraging to see this month’s report was being driven by starts for single-family homes – rising to their highest levels in more than eight years. While we’ve experienced month-to-month volatility in these reports, it’s important to focus on the positive trend reflected in the year-over-year data.”
The report shows multifamily starts hovering in place with a small 0.8 percent increase. While single-family permits remained practically unchanged, multifamily permits fell 8.4 percent.
“The overall takeaways from this report are that month-to-month we are seeing the expected growth in new construction, but we also appear to be at an inflection point with regard to single-family construction now growing faster than multi-family,” says Jonathan Smoke, Realtor.com’s chief economist. “It is somewhat concerning that the pace of starts is now greater than the pace of permits. This could be a one-month anomaly given the tendency of the starts data to be revised, but if the pattern holds, it would signal slower growth ahead in construction activity. That is not what the market needs to address the undersupply of both for sale and for rent units on the market.”
What are the reasons behind this golden single-family report? Experts point to rising employment, low mortgage rates and heightened housing demands.