by Lisa Sturtevant, PhD
Chief Economist, Bright MLS
The U.S. Census Bureau reported this week that privately owned housing starts in March were at a seasonally adjusted annual rate of 1,321,000. Starts of new single-family homes are up 21.2% compared to a year ago; however, multifamily housing starts are down sharply.
New builds fuel an optimistic outlook in the West
Housing starts surged in the West in March, posting strong gains after an anemic 2023. This increase in new construction in the western region is a good sign for home shoppers there who have faced high prices and limited inventory.
More options are expected in the coming months
Inventory has been a major constraint on the housing market, and new construction has been an outsized share of the market. With homebuilding activity still strong, buyers are now also seeing more listings of existing homes coming onto the market. While overall inventory is still low by historical standards, this spring and summer should offer buyers more options. Builders who may have held back on incentives or price cuts might be looking for ways to entice homebuyers who are shopping existing homes.
The median price of an existing home rose by 5.85% in February, the biggest gain in 18 months. Prices of new homes, however, fell in February, down 7.6% year-over-year.
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