Single-family housing starts began an expected, coronavirus-related decline in March, according to estimates from the Housing and Urban Development and Commerce Departments. Construction activity is expected to fall as COVID-19 mitigation efforts result in increased unemployment, economic uncertainty, and lost business activity.
Housing starts and building permits can indicate possible construction of new water well systems.
Despite a strong start for 2020 in January and February, the April NAHB/Wells Fargo HMI point to additional construction declines ahead. In particular, April and May will likely show the lowest construction rates, on a seasonally adjusted basis, for 2020.
Single-family starts declined 17.5 percent in March to a seasonally adjusted annual pace of 856,000. Multifamily starts for units in five-plus unit properties declined 32 percent to a 347,000 annualized rate after a strong yet unsustainable start for 2020 for apartment construction.
As of March 2020, there were 534,000 single-family homes under construction. This is flat from a year ago. There are currently 684,000 apartments under construction, up almost 15 percent from a year ago and near a post-Great Recession high. As starts slow, this count will decline in the quarters ahead.
Furthermore, construction can continue in a majority of states, as home building is deemed an essential business activity. The Housing and Urban Development and Commerce Departments estimate approximately 90 percent of single-family units under construction are located in “essential” states and 80 percent of apartment units are located in such states.
Click here to read more.