The residential housing market continued its remarkable ascension in March, according to a market report published this week by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). The report indicates some more positive news for the industry in the face of several attendant economic issues including rising inflation and a tough labor market. 

Overall, housing starts went up b 0.3% to 1.788 million in a continuation of recent market trends that have bucked the simultaneous increase in material prices and mortgage rates, which are at an eleven-year high. The March figure is 3.9% higher than the same period last year, and significantly higher than the 1.216 million starts registered at the beginning of the pandemic in March 2020.

“Even with rising interest rates and ongoing issues surrounding geopolitical stability, supply chain issues, and inflation, the overall lack of inventory over the past year has continued to drive demand for more housing starts as builders continue to try to push inventory to market,” real estate consultant Kelly Mangold explained to Market Watch.

The gains are all mostly to do with an increase in multi-family starts, as new single-family developments fell by 1.7% to 1.2 million. A total of 574,000 multi-family starts were reported for developments with five or more units. Economists predicted a further upsurge in starts driven by recovered demand and the now finally suppressed prices of certain materials.

“With lumber costs trending down since early March, from about $1,300 to $890 per thousand board feet, construction companies continue to bet that market demand will remain viable,” George Ratiu, Manager of Economic Research at Realtor.com, added. “To that end, builders hired more than 100,000 construction workers over the past 12 months.”