The headline housing starts number for March is out today (PDF) and it shows a 7 percent month-to-month increase in housing starts in March 2013. On the other hand, the new housing permits series, which I like better since it can be collected with less sampling error, shows an essentially flat market on a month-to-month basis. Year on year it’s clear that housing is still surging with permits up 17.3 percent and starts up 14 percent.
An interesting trend is that almost 40 percent of these starts are in multifamily units which is way higher than the 20 percent long-term average. That’s precisely what the American economy needs. Recession-battered household may have neither the downpayment nor the credit rating needed to become homeowners but they still need a place to live and between high corporate profits and decent stock market performance there are people out there with the means to finance home construction. It continues to seem to me that the best possible news for the national economy would be for high-cost metro areas to change zoning rules to allow for more multi-family construction both in center cities and in inner ring suburbs. There’s very little fungibility in the nation’s housing stock, and vacant single-family structures in the suburbs of Las Vegas are a poor substitute for abundant dwellings in the Bay Area, Greater New York, Washington, Seattle, and other prosperous-but-expensive parts of the country.