New housing development in Connecticut during March brought a mixed bag of news for the state’s economy.
The state Department of Economic and Community Development reported Wednesday that there were new permits approved for 401 units last month around the state. That represented a 40.7 percent increase over the number of units approved around the state in March 2018.
But over the first three months of this year, the number of units issued permits statewide decreased by 13 percent, or 135, to 899.
Many economists consider year-to-date data a more accurate indicator because it represents a larger sample size. Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners, said “right now, many of the key economic indicators are turning to the down side.”
“Given the odds of a national recession are greater now than they have been in the last 10 year, that’s not good news,” Klepper-Smith said.
The housing permit data, he said, was released just hours after a report on single-family home and condominium sales brought some sobering news: Home sales were 4.7 percent lower in March, making it the eighth consecutive month in which sales were down on a year-over-year basis.
“Median single-family housing prices in Connecticut are down 2.1 percent,” he said. “In Massachusetts, that number is up by 6 percent.”
The new housing permit news is a reflection of turbulence in Connecticut’s employment numbers, Klepper-Smith said. Last week, the state Department of Labor reported Connecticut’s economy lost 1,300 jobs compared to same period a year ago, and the three-month average of job growth so far in 2019 is in negative territory.
“There’s quite a bit of volatility in the March data,” Klepper-Smith said. “Traction in the local housing market is a function of traction in the labor market. To the degree that you undermine job growth in the aggregate, housing numbers are going to be affected to the down side.”
New housing activity is considered a key economic indicator because of the number of jobs associated with it as well as the need to purchase durable goods to go into the homes. Examples of durable consumer goods are appliances, home and office furnishings, lawn and garden equipment as well as consumer electronics.
Last month was the busiest March in terms of permit activity since 2016.
New Haven had the largest amount of permit activity in March with 194 units issued permits, followed by Milford with 15 and Greenwich with 12.
Multi-family housing, housing complexes of five units or more, accounted for 61.5 percent of the permits issued statewide.