Housing Starts Top High Estimates

The residential construction business had a very strong March: housing starts easily topped Econoday's high estimate at a 1.319 million annualized rate while permits came in just shy of the top estimate at a very strong 1.354 million.

Multi-family units are the standout in the March report. Starts for this group rose 14.4 percent in the month to a 452,000 rate with permits 19.0 percent higher at 514,000. Single-family units are soft with starts down 3.7 percent to an 867,000 rate and with permits down 5.5 percent to an 840,000 rate in a result offset by a large upward revision to February.

One clear negative, perhaps tied to weather, is a slowing in completions which fell 5.1 percent to 1.217 million. This is not good news for a housing market starved of supply.

Housing had an uneven start to the year with March sales results still to be posted. Sales side, residential investment looks to be a positive contributor to first-quarter GDP as housing construction ended the quarter with visible momentum going into the second quarter.