After surging 22 percent in February, housing starts dipped 10.8% in March to a seasonally-adjusted annual rate of 510,000, according to government data released this morning, blasting hopes that stability had begun to return to the housing market. Housing starts in March sat 48.4% below the March 2008 rate and mark the second lowest rate since the 1940s. “It’s disappointing. Half a million in starts is real low,” Kurt Karl, chief U.S. economist at Swiss Re told Reuters. But he believes things are hitting the floor and are likely to turnaround over the next few months. The pace of single-family housing starts in March, which excludes apartment buildings, was actually unchanged from February’s revised figure of 358,000 the Commerce Department said, meaning there was a significant tumble in apartment construction during the month of March — ironically, apartment construction was the driving force for housing starts last month, increasing a whopping 82%. In terms of construction volume in March, the South fared the best comparatively speaking, as the region started construction on 268,000 total housing units and 191,000 single-family homes, but its month-over-month pace for all housing starts still plunged 16.8%. The Northeast experienced the slowest pace in volume, starting just 67,000 housing units and 47,000 single-family homes; although, single-family homes in the Northeast saw the biggest month-over-month increase, climbing 30.6% from February to March. Building permits, which are less volatile than construction starts, hit record lows, falling 9% in March to a seasonally-adjusted annual pace of 513,000, which is well below most analysts predictions. Permits for single-family homes fell 7.4% to 361,000, the second-lowest on record. On the upside, builder confidence in the market for newly built, single-family homes rose five points in April to its highest level since October 2008, according to the latest National Association of Home Builders sentiment index. Every component of the index reflected the boost in sentiment, with the biggest gains recorded for sales expectations over the next six months. Write to Kelly Curran at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.

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