The housing market has finally begun to emerge from the winter doldrums, but still trails behind year-ago levels, when the home buyer tax credit was still in effect. Housing starts and permits for future home construction issued in March were higher than expected, according to data released by the Commerce Department
report on Tuesday.
Housing starts in March were recorded at a seasonally adjusted rate of 549,000, or 7.2 percent above a mediocre 512,000 in February. But even with a seasonal boost from spring home buying, March figures are still 13.4 percent below the year-ago rate of 634,000.
Building permits were also up in March with a seasonally adjusted rate of 594,000, 11.2 percent above the revised February rate of 534,000. Like housing starts, permits in March also fell short of the year-ago rate, due in part to the absence of the home buyer tax credit, which incentivized homebuyers with an up to $8,000 credit. Permits in March came in 13.3 percent below the year-ago rate of 685,000.
"This time last year was right after the first-time home buyers tax credit so you're comparing these numbers to a high level of volatility," Alex Holder, economic analyst for FTN Financial, told Reuters
While the uptick in March may conform to spring expectations, any upward movement is positive after last month's figures, said Vimombi Nshom, an economist at IFR Economics.
"Although small in magnitude, any gain will suffice given February permits had sank to what was originally thought to be a record low of 517k," he told Reuters
As another recent housing market report
concluded, however, growth through the end of the year will be contingent on clearing the biggest hurdles in today's market – namely, a vast inventory of foreclosed properties and continued investigation into mortgage lender practices.
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