Multifamily Boosts Housing Starts Beyond Million Mark
Soaring production of multifamily apartments pushed nationwide housing starts beyond the million-unit mark for the first time since 2008 in March, according to government data released April 16. While single-family production slipped 4.8% to a seasonally adjusted annual rate of 619,000 units, a 31.1% gain to 417,000 units on the multifamily side provided the boost needed to raise the overall production pace by 7% to 1.036 million units.
Importantly, the decline on the single-family side was entirely due to a substantial upward revision to the previous month’s data, without which virtually no change would have been recorded this time around. Meanwhile, the pace of multifamily production was the best seen since January of 2006.
Three out of four regions posted gains in combined single- and multifamily housing production in March, with the Midwest registering a 9.6% increase, the South posting a 10.9% gain and the West noting a 2.7% rise. The Northeast was the lone exception to the rule, with a 5.8% decline. Meanwhile, permit issuance for all new housing units fell 3.9% to a 902,000-unit rate in March after recording a big gain in the previous month. That decline reflected a 0.5% reduction to 595,000 units on the single-family side and a 10% reduction to 307,000 units on the multifamily side. In contrast to the regional starts report, the Northeast was the only part of the country to post a gain in permitting activity in March, with a 24.7% increase. The Midwest, South and West posted declines of 2.1%, 6.2% and 10.4%, respectively.
Calling the latest data a “mixed bag” due to the opposite direction of single- and multifamily starts and the somewhat weaker permit issuance, NAHB Chief Economist David Crowe said the numbers still indicate “a continuation of the slow, methodical march forward” that characterizes the housing recovery. He also noted that “The three-month moving average for single-family starts remained unchanged at 628,000 units in March – which is right on pace with NAHB’s forecast for a 25% gain in new-home production in 2013.”
DOE Rescinds May 1 Compliance Deadline for Gas Furnace Standard
NAHB has received several member inquiries regarding the compliance date for amended energy conservation standards that apply to residential furnaces. The new standards for non-weatherized gas furnaces, which were proposed by the Department of Energy (DOE) in mid-2011, were scheduled to be in effect as of May 1, 2013, but a lawsuit brought by the American Public Gas Association challenged the stricter energy consumption rules for those appliances in the northern region of the United States. That lawsuit led to a settlement agreement this January that would vacate the energy conservation standards applicable to non-weatherized gas furnaces within the DOE's final rule. While the settlement must still be finalized, in the meantime the DOE this month issued a statement that it will not be enforcing the new standards unless or until the court rejects the joint agreement that is expected to remand them.
Bottom line for NAHB members: The May 1, 2013 compliance date for non-weatherized gas furnaces WILL NOT be enforced by DOE pending final settlement of the litigation between DOE and the American Public Gas Association.
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