U.S. homebuilding showed an unexpected increase in March. However, starts for single-family homebuilding dropped amid increasing mortgage rates. Single-family housing starts declined by 1.7% to 1.200 million units in the last month.
On Tuesday, the Commerce Department said that the housing starts rose 0.3% to a seasonally adjusted yearly rate of 1.793 million units the previous month.
The forecast by economists was 1.745 million units. In March, future home building permits increased 0.4%, with 1.873 million units.
According to data from mortgage finance agency Freddie Mac, the 30-year fixed-rate mortgage averaged 5.0% in the week ended on April 14, up from the 4.72% in the last week. Further growth is likely with the central bank adopting a tight monetary policy to battle sky-high inflation.
Goldman Sachs estimates, “Housing starts will show increase of 5% to 1.7 million this year. When housing markets are tight today, homebuilders are likely to keep building because they should have little fear that homes will sit vacant after completion.”