US: Housing starts increased across every region – Wells Fargo

Housing data released on Friday in the US showed better-than-expected numbers, with an increase in housing starts by 19.4%. Analysts at Wells Fargo point out home building had gotten off to a strong start in 2020 before the lockdown caused activity to plummet in April. They see that the soft patch will inflate year-to-date comparisons over the next couple of months.

Key Quotes: 

“Housing starts rebounded solidly in March, with overall starts rising 19.4% to a 1.739 million-unit pace. Single-family starts jumped 15.3%, with activity rising solidly in every region except the West. Multifamily starts surged 30.8%, with large gains in the Northeast, Midwest and South. Both the number of homes under construction and number of homes completed rose solidly in March and both series hit their highest levels in more than 13 years.”

“This past month's rebound in housing starts should put to rest any debate about how much of February's drop was due to the extreme weather that impacted Texas and other parts of the South and Midwest and how much was due to supply-chain bottlenecks and soaring building materials prices.”

“Home builders are clearly ramping up construction to meet strong demand and the dearth of both new and existing home inventories. Yesterday's NAHB/Well Fargo Housing Market Index (HMI) rose one point to 83 in April.”

“The improvement in operating fundamentals and stronger economic outlook apparently are convincing enough for apartment developers to move forward with projects that had been put on hold.”

“Housing completions jumped 16.6% in March, marking the largest increase since January 2019. A 54.7% surge in multifamily completions accounted for large part of the increase.”

“The number of homes under construction at the end of March rose 0.8%, with single-family homes rising an even larger 1.6% to 636,000-unit pace. All four regions saw construction increase, with the largest gains coming in the Midwest and West.”