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New Housing Construction Takes a Surprising Leap04-19-04 | News

New Housing Construction Takes a Surprising Leap

Housing construction sped up to a surprising rate in March, wowing economists and reflecting consumer and homebuilder confidence.

Economists had predicted that housing units would rise from the revised February rate of 1.887 million to 1.9 million in March. Like asking for a toy horse and getting a real pony, economists got their rise in new housing starts: all 6.4% of it. In the fastest increase in a year, the seasonally adjusted number of new homes built in March increased to 2,007,000, which is 15% above last March?EUR??,,????'???s level, according to the US Census Bureau.

The number of permits granted for new homes in March also felt a lift as it jumped 1.9% to a seasonally adjusted rate of 1,946,000, up from February?EUR??,,????'???s revised estimate of 1,887,000 units. This indicates that the rate of housing starts will continue to remain buoyant.

As economists debate when the federal reserve will raise the federal funds rate, which is the rate that banks charge each other on overnight loans, they agree that the rate will hold at the 45-year low of 1% through the Central Bank?EUR??,,????'???s next meeting on May 4. The low federal fund rate tends to mirror low mortgage rates. However, thirty-year mortgage rates rose to 5.89% this week, the highest level since December.

Last year?EUR??,,????'???s new home construction rate reached the highest level ever. Economists predict that this rate will remain robust through 2004.

Sources: U.S. Census Bureau; www.canada.com; www.ft.com

Seasonally Adjusted Rates

New Privately-Owned Housing Units Authorized in Permit-Issuing Places

Units
Number in
Thousands of Units
% Change
From Feb '04
% Change
From Mar '03
Total Homes 1946 +1.9 +15.3
1 Unit 1523 +0.4 +16.2
2-4 Units 96 +24.7 +35.2
5+ Units 327 +3.8 +6.9

New Privately-Owned Housing Units Authorized, but Not Started

Units
Number in
Thousands of Units
% Change
From Feb '04
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% Change
From Mar '03
Total Homes
180.1 +4.8 +5.8
1 Unit 124.1 +7.1 +15.1
2-4 Units 6.7 +36.7 +32.1
5+ Units 49.4 -3.6 -13.9

New Privately-Owned Housing Units Started

Units
Number in
Thousands of Units
% Change
From Feb '04
% Change
From Mar '03
Total Homes 2007 +6.4 +15.2
1 Unit 1599 +5.5 +14.8
5+ Units 377 +11.2 +20.4

New Privately-Owned Housing Units Under Construction at End of Period

Units
Number in
Thousands of Units
% Change
From Feb '04
% Change
From Mar '03
Total Homes 1229 +1.7 +16.7

New Privately-Owned Housing Units Completed

Units
Number in
Thousands of Units
% Change
From Feb '04
% Change
From Mar '03
Total Homes 1749 +1.5 +7.9
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