Single-family housing starts unexpectedly jumped 7.7% in March and the government revised upward its estimates of building activity in February and January by 23,000 units.
The Census Bureau reported on Tuesday that single-family starts rose to a seasonally adjusted annual rate of 422,000 in March from a 392,000 rate in February.
A month ago, the government reported that starts fell to a 375,000 rate in February, down almost 12% from a 425,000 rate in January. (The latest report also shows the January estimate has been bumped up by 5,000 starts to a 430,000 rate.)
Despite the upward revisions, single-family construction activity in March is still 21% below the start rate of a year ago. Multifamily starts rose 14.7% from February to March to an 117,000 seasonally adjusted annual rate. Starts of apartment buildings with five or more units were up 28.6% from March 2010.
A report from Deutsche Bank said housing affordability is at an all-time high. (The report drew from figures compiled by the National Association of Realtors.)
Analysts at the bank said the acceleration in affordability is "unprecedented" and should help stabilize housing starts.
Deutsche Bank said lending standards are the chief reason housing activity has stalled.
"This is the one area where senior loan officers are still tightening, unlike what they have done for consumer and commercial/industrial loans," the bank said.
Its analysts believe when banks and mortgage firms "become willing to make mortgages, surging affordability should lift construction — perhaps by a significant amount."
Mortgage rates are off their historic lows of the fall and early winter, but some lenders report that potential home buyers are becoming more active, believing that rates will continue to rise and want to lock in now.
