In March, for the first time since 2008, housing starts have reached 1 million. The start for new housing is up 7% from February and 47% from last year, with an annual rate of 1.04 million. This was a much stronger gain then forecasted.
Many of the starts were due to a large increase in the building of apartments and condos having 5 or more buildings. Both types of units made jump of 27% since February and 82% from last year’s numbers. The reasons behind such a strong demand for rentals are younger workers who were living with parents and unable to move out due to the recession, are now able to get their own place, and former homeowners who had to file bankruptcy or foreclose on their homes, are unwilling or unable to buy.
Although the sales for single family homes are up, the actual build starts are down by 6%. One of the reasons they are down is higher costs on building materials and labor shortages. With the cost of plywood and particle board nearly twice what it was last year, lumber up 50-60% and drywall up 40%, builders may have trouble obtaining higher credits to purchase the materials.