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Bloomberg
US new-home construction rose by more than forecast in March on a rebound in multifamily starts, giving a boost to first-quarter economic growth, government figures showed on Tuesday.
The results show a tight job market, improved finances and consumers’ elevated confidence to purchase big-ticket items are supporting construction. That means homebuilding probably contributed to economic growth for the second consecutive quarter.
The strength in March was concentrated in multifamily construction such as apartment buildings. That category tends to be volatile; March’s advance in starts followed a 10.2 percent drop in the prior month. Permits for single-family homes were a weak spot, dropping 5.5 percent, the biggest decline in seven years, to the lowest level since September.
While demand remains solid, a shortage of workers, rising costs for materials and a scarcity of ready-to-build lots are limiting gains in building activity. With borrowing costs rising, affordability is also becoming a hurdle, as property values outpace potential buyers’ income growth. Sentiment among homebuilders fell in April for a fourth straight month amid limited land availability and higher lumber prices, according to data from the National Association of Home Builders/Wells Fargo.