For the first three months of the year, residential building starts fell 29% amid tighter financial conditions. And while a 5% gain in March is a slight improvement, it still points toward a weaker year for home building in 2023. Single-family starts inched up 4% in March, while multifamily starts rose 8%, according to Construction Dive.
Construction starts are expected to lose momentum as the year goes on but could gradually improve if mortgage rates continue to fall from peak highs.
“Several large manufacturing projects are breaking ground, pushing nonresidential buildings higher, while a nascent recovery in single-family starts has been supporting residential growth,” said Richard Branch, Dodge chief economist. Nevertheless, starts are likely to erode as the year progresses, he said, as seen by the declining trend in the Dodge Momentum Index, which tracks projects entering the earliest stages of planning.
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