Housing Starts
New residential construction increased 7.2% in March to an annualized rate of 549,000 units, better than expected. Single family starts were up 7.7% in March, after a small revision to February’s numbers. Multifamily homes improved by 5.8% to 127,000. Over the year total starts are down 13.4%. Building permits for new homes increased 11.2% to 594,000 in March but over the year permits are down 13.3%.  Housing completions in March decreased to an annual rate of 509,000 from the upwardly revised February rate of 593,000. Single-family completions remain down from a year ago. This report reinforces our outlook for only modest improvement in the housing market this year.

Existing Home Sales
Existing home sales increased 3.7% in March to 5.10 million annualized units from 4.92 million in February. Over the year sales are down 6.3%. Inventory increased 1.5% to 3,549,000 from 3,498,000 in February. At the current sales rate the months’ supply is 8.4, down from 8.5 in February. Median home prices increased 2.2% in March, from $156,100 in February. The gains were widespread across the four regions of the U.S. Over the past year prices are down 5.9%. Sales in March were a bit stronger than recent lows, but we are far from a healthy housing market.

Leading Indicators
The Conference Board’s index of leading indicators rose 0.4% in March led by the interest rate spread and building permits, however gains were widespread. March was the ninth consecutive month of increases. Declines came from drags in consumer expectations, new orders, stock prices and the money supply. The coincident index also improved, up 0.2% in March. The leading indicators have increased at a more rapid pace in the past three months and it appears that the economy should begin to see more robust growth in 2011. The solid gains are consistent with above-trend growth.