Housing Starts Rebound to 6-Month High but Americans Still Don’t Want Homes

U.S. housing starts jumped 7.2 percent in March to a six-month high, according to the Commerce Department. This is a major improvement over the previous month when new home construction saw the biggest decline in 27 years.

New Home Construction Makes Recovery

After disappointing numbers in February, it looked as though no builders would be interested in constructing new homes this year. But according to the Commerce Department, this changed in March as builders picked up housing starts (the construction of a new housing unit, including an apartment, house, mobile home or group of homes).

The department found that new home construction reached an annual pace of 549,000 houses. This exceeded the 520,000 median forecast from economists who were surveyed by Bloomberg News. Even better, it helped to rebound home construction from a 479,000-annual pace in February that represented a 22.5-percent drop from the month prior (this was later revised to a still-disappointing 19-percent drop).

The good news is that builders feel enough confidence to build new homes. Unfortunately, the gain in March was not enough to make up for ground lost in February and, some think, won’t encourage people to go out and get new homes.

Americans Aren’t Interested in Buying Homes

When it comes to the housing market, new housing starts are just a piece of the puzzle. They serve as an indicator, a way to know how builders feel about their ability to sell new homes. If they build more, they think they’ll be able to sell them.

Unfortunately, the jump in housing starts may not serve as an accurate reflection of the market. With more foreclosures on the way and millions still unemployed, many Americans are still not interested in taking on a mortgage loan.

A recent Bloomberg article revealed that even those Americans who can afford a mortgage are afraid of dropping home values along with the prospect of being stuck with an underwater mortgage soon after making the purchase. With so much to worry about and so little reason to feel confident in the housing market, it’s no wonder that the road to recovery has been slow and unsteady.