New Construction Slows But Remains Higher Than Last Year
April 17, 2020
Home builders started on fewer new homes in March as the COVID-19 pandemic spread across the nation. New construction was at a pace of 1.22 million units in March, the Commerce Department reported Thursday. However, that number is still 1.4% higher than a year ago.
Building permits—which help gauge future construction activity—were at a seasonally adjusted rate of 1.35 million in March, still 5% higher than last year’s rate. Nevertheless, a slowdown is inevitable, builders say, as COVID-19 takes an economic toll. The decrease in homebuilding activity represents a shift from the beginning of the year, when record-breaking permitting activity gave the indication that a building frenzy was likely in 2020.
“Housing has been deemed an essential business in most of the nation, and in the few states where the governors have not acted, we urge them to deem construction as essential,” says Dean Mon, chairman of the National Association of Home Builders. “Housing can help lead an eventual rebound, as it has done in previous recessions.”
About 534,000 single-family homes and 684,000 apartments are currently under construction. About 90% of these single-family homes are located in states where homebuilding has been deemed an “essential service,” while 80% of apartments are located in such states, says Robert Dietz, NAHB’s chief economist.
National Association of Home Builders and “New-Home Construction Records Biggest Monthly Decline Since March 1984, as Coronavirus Pandemic Takes a Toll,” MarketWatch (April 16, 2020)
Updated: May 28, 2020