After one of the worst postings on record, spring came with an uptick for starts and permits in March, according to data released today by the U.S. Census Bureau and HUD. Unfortunately, a small movement up from rock bottom still leaves the industry a long way down. The question is whether this is the first step in an upward trend or just a blip as home building bounces along the floor.

Patrick Newport, U.S. economist at IHS Global Insight, isn’t extremely hopeful. Pointing to permits as the better industry measure as they are less impacted by changes in the weather, notes that even after single-family permits’ 5.7% increase in March, the reading is still the 11th lowest on record (data start in 1960). “Single-family permits have not budged in two years,” Newport said in a press release today. “March’s reading gives no reason to believe that they are ready to take off soon.”

Housing inventory has dropped to 509,000 units, the lowest level on record.

Multifamily development continues to be the exception. Permits for multifamily housing jumped 25.2% to an annual rate of 189,000 units. Even Newport concedes that “unlike the single-family category, multifamily permits appear to be trending up—ever so slightly—nationally and in the West, Northeast, and South.”

Multifamily starts also increased almost twice as fast as single-family starts, which went up 7.7% while multifamily jumped 14.7%.

While several factors have combined to align the stars for multifamily housing, financing is one of the most critical. As single-family builders have had to fight with banks to get money for projects, multifamily builders report being flush with available investor cash. And it’s this access to cash that Newport says will be critical to determining when the rest of the industry follows the multifamily upward trend. “Our view is that the housing market will start to get back on its feet this year,” he predicted. “The forecast, however, hinges on builders being able to access credit. If builders cannot get financing to build new homes, housing will remain in the dumps.”

Claire Easley is senior editor, online, at Builder.

Learn more about markets featured in this article: Greenville, SC.