AAP
US homebuilders have broken the one million mark in March for the first time since June 2008. The gain signals continued strength for the housing recovery at the start of the northern spring buying season.
The overall pace of homes started rose seven per cent from February to March to a seasonally adjusted annual rate of 1.04 million, the Commerce Department said on Tuesday.
Apartment construction, which tends to fluctuate sharply from month to month, led the surge: It jumped nearly 31 per cent to an annual rate of 417,000, the fastest pace since January 2006.
By contrast, the single-family home building, which makes up nearly two-thirds of the market, fell 4.8 per cent to an annual rate of 619,000. That was down from February's pace of 650,000, the fastest since May 2008. The government said February's pace was a sharp 5.2 per cent higher than it had previously estimated.
Applications for building permits, a gauge of future construction, declined 3.9 per cent to an annual rate of 902,000. It was down from February's rate of 939,000, which was also nearly a five-year high.
Paul Ashworth, chief US economist at Capital Economics, called the data "obviously good news". But he noted that the surge was due to a jump in volatile apartment construction and said the pace of building could drop in April.
Steady job growth, near record-low mortgage rates and rising home values have encouraged more people to buy. In response to higher demand and a low supply of available homes for sale, builders have stepped up construction.
March's pace of homes started was nearly 46 per cent higher than in the same month in 2012.
Housing construction fell 5.8 per cent in the northeast but gained in the rest of the country, led by a 10.9 per cent rise in the south. It rose 9.6 per cent in the midwest and 2.7 per cent in the west.
The National Association of Home Builders/Wells Fargo April survey released on Monday showed that builders are concerned that limited land and rising costs for building materials and labour could slow sales in the short term. That led to a third straight monthly drop in confidence.
Still, the builders' outlook for sales over the next six months climbed to the highest level in more than six years, suggesting that the obstacles could be temporary.
And construction firms have stepped up hiring in recent months. They added 18,000 jobs in March and 169,000 since September, according to the Labor Department.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $US90,000 ($A87,027.99) in tax revenue, according to statistics from the homebuilders.