Economy Watch: Housing Starts See Uptick in March
- Apr 17, 2014
U.S. housing starts in March came in at an annualized rate of 946,000 units, according to the Census Bureau on Wednesday. This is 2.8 percent higher than the revised February estimate of 920,000 units, but 5.9 percent lower than the March 2013 rate of 1.01 million units.
At an annualized 635,000 units, single-family housing starts were the driver of the monthly increase, registering a 6 percent increase compared with February. The March rate for buildings with five units or more was 292,000 units, or a drop of 6.1 percent from the previous month. Multifamily starts tend to be jumpy month-over-month.
For the first quarter of 2014, there were a total of 203,000 housing starts nationwide. At that pace, starts for the year would be quite weak, but there’s some indication that at least some of the sluggishness in housing starts for the quarter was weather-related, and thus transient. Higher prices and lower inventories are also probably a factor in keeping starts low.
Beige Book points to increased economic activity
The Federal Reserve released its latest Beige Book on Wednesday, reporting that economic activity increased in most regions of the country since the previous report. For instance, consumer spending increased in most districts, as weather conditions improved and foot traffic returned, with auto sales picking up in a lot of places. In addition, tourism was fairly strong in a lot of places, especially where snow-rich ski resorts had record seasons.
Reports on residential housing markets varied. In most districts, home prices rose modestly and inventory levels remained low. Residential construction increased in several places, with a few districts—only Cleveland, St. Louis and Minneapolis—reporting a decrease.
Commercial property construction activity strengthened recently the Kansas City and Dallas districts (note: districts cover a lot more ground than just those metros). The Richmond, Atlanta, Chicago, St. Louis, Minneapolis and San Francisco districts reported “modest to moderate” expansion in commercial construction. Philadelphia noted mild growth, while Cleveland reported a slight decline in commercial property construction.
Wall Street had another positive day on Wednesday, with the Dow Jones Industrial Average gaining 162.29 points, or 1 percent. The S&P 500 was up 1.05 percent, and the Nasdaq advanced 1.29 percent.