March Housing Starts: Builders Press On

• March housing starts totaled 1.79 million (SAAR), up 0.3% from February 2022 and up 3.9% from March 2021, according to the U.S. Census Bureau.
• Housing permits issued in March were up 0.4% from February and up 6.7% from a year ago, to 1.87 million (SAAR).
• 1.30 million (SAAR) homes were completed in March, down 4.5% from February and down 13.0% year-over-year.

With supply chain issues and high input costs persisting, builders beat expectations and the pace of starts from a month earlier. Perhaps more notable is that new permits also moved slightly higher, which may be a sign that builder confidence in the future outlook of home sales is holding at these recent highs. Mortgage interest rates rose above 5% for the first time since 2011 this month, driving down affordability for potential buyers. Thus far, enough buyers have been willing and able to meet today’s asking prices to keep home values ticking up at a record pace. But with lengthy build times and a swelling backlog of projects to be completed, builders must take a long-term view and their willingness to take on new projects may start to wane. For months, builders have kept their foot on the gas amid persistent supply shortages and rising prices, and March’s construction figures indicate that they’re still ready to push ahead.