Single-family housing starts unexpectedly jumped 7.7% in March and the government revised upward its estimates of building activity in February and January by 23,000 units.

The Census Bureau reported Tuesday morning that single-family starts rose to a 422,000 seasonally adjusted annual rate in March from a 392,000 rate in February.

A month ago, the government reported that starts fell to a 375,000 rate in February, down almost 12% from a 425,000 rate in January. (The latest report also shows the January estimate has been bumped up by 5,000 starts to a 430,000 rate.)

Despite the upward revisions, single-family construction activity in March is still 21% below the start rate of a year ago. Meanwhile, multifamily starts jumped 14.7% from February to March to an 117,000 seasonally adjusted annual rate. Starts of apartment building with five or more units are up 28.6% from March of 2010.

Meanwhile, a new report from Deutsche Bank noted that housing affordability is presently at an all-time high. (DB's proclamation is based on figures compiled by the National Association of Realtors.)

Bank analysts note that the acceleration in affordability is "unprecedented" and it should help stabilize both housing starts and residential construction.

DB believes the chief reason why housing activity has stalled is lending standards. "This is the one area where senior loan officers are still tightening, unlike what they have done for consumer and commercial/industrial loans," the bank said.

Its analysts believe when banks and mortgage firms "become willing to make mortgages, surging affordability should lift construction—perhaps by a significant amount."

Mortgage rates are off their historic lows of the fall and early winter, but some lenders report that potential home buyers are becoming more active, believing that rates will continue to rise and want to lock-in now.

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