Housing construction rose to its highest in 16 months in March promising hope for Miami new homes. Multifamily homes, which account for less than 20 % of the market, were credited for the gain.
On Friday, the Commerce Department report that single-family home construction and Miami new homes, the most important segment of the market, fell 0.9% to an annual rate of 531,000 units. But permits for single-family construction which are the gauge of future activity were up.
RealtyTrac said a record number of U.S. homes and other Miami real estate properties were lost to foreclosure in the first three months of the year.
With these foreclosed homes selling at such low prices builders are at a disadvantage, hiring in the construction industry has slowed and the broader economic recovery is restrained.
Overall construction rose 1.6% to a seasonally adjusted annual rate of 626,000, the Commerce reported on Friday which was much higher than the 610,000 level economists expected.
February's numbers were revised by the government to show a 1.1% gain rather than the initially reported drop of 5.9%.
Applications for building permits rose to an annual rate of 685,000, a 7.5% rise.
The weakness in single-family construction and Miami new homes was make up for by an 18.8% rise in the smaller multifamily sector, which rose to a seasonally adjusted annual rate of 95,000 units.
Given a multitude of problems facing commercial real estate, analysts do not expect this strength to continue including high apartment vacancy rates and rising foreclosures of commercial properties.
Contributed by MLR Realty
