(Photo: Reuters)
The Commerce Department said on Tuesday housing starts fell in the U.S. more than expected in March, but building permits indicate the market recovery remains intact. The construction of single-family homes in the Midwest recorded its biggest decline in three years, with overall housing starts falling 6.8% to a seasonally adjusted annual rate of 1.22 million units.
Single-family homebuilding, which account for the largest share of the residential housing market, fell 6.2% to an 821,000 unit pace last month, falling from a near 9-1/2-year high. In the Midwest, single-family starts tanked by 35%, the largest drop since January 2014 and the lowest level since August 2015.
Single-family starts in the Northeast were flat, while the South saw a 3.2% rise. The West also saw a decline of 5.5%.
Housing starts for February were revised up to a 1.30 million-unit pace from the previously reported 1.29 million-rate.
Still, building permits increased 3.6%, but were driven by a 13.8% gain in the multi-family segment.
Economists had forecast groundbreaking activity falling to a 1.25 million-unit pace last month. Homebuilding was up 9.2% compared to March 2016.
“March data are often difficult when seasonal factors, including heavy weather, are often at play,” Econoday said in reaction. “But the weakness in starts and strength in permits do point to a possible and favorable theme for the first-half economy in general: weakness in the first quarter followed by a sizable rebound in the second.”
