WASHINGTON (AP) – U.S. homebuilders opened the spring buying season in March at a slower pace than last year, a warning that recent hiring gains have failed to translate into a stronger real estate market.
Construction firms broke ground at a seasonally adjusted annual rate of 926,000 homes last month, a 2.5 percent decline from the pace in March 2014, the Commerce Department said Thursday.
Steady job growth, low mortgage rates and cheaper gasoline have given consumers more flexibility. But the improved economy has yet to significantly boost sales and construction.
Still, the warmer weather helped after a brutal winter. March housing starts rebounded 2 percent from this past February’s rate of 908,000 homes. Builders broke ground on more homes in the Northeast and Midwest, two areas hammered by snow storms and freezing temperatures in previous months. But the pace of construction slipped last month for the South and West.
March traditionally marks the start of the spring home buying season, when more people flood into the market and sales increase. But the relatively modest pace of new construction and few homes being listed for sale have kept inventories tight, limiting the potential for sales to rise. Homebuilders have increasingly focused on two key markets: wealthier buyers and apartment complexes, because increasingly expensive houses have priced many out of the market and led them to rent.