Month-over-month housing starts were stronger than expected in February, but building permits, housing starts and housing completions all fell below the annual rate of construction seen one year ago, according to statistics from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
February housing starts were at a seasonally adjusted annual rate of about 1.501 million units, 11.2% above the revised January estimate of 1.35 million, one of the few bright spots in the HUD-Census Bureau report. Single-family home starts were at an annual rate of 1.108 million units, 11.4% above January’s level. The month’s rate for home starts in buildings with five units or more was 370,000. However, housing starts were still 2.9% below the rate from a year ago.
Permits to build housing units fell to a seasonally adjusted annual rate of 1.456 million, down 1.2% from January’s annual rate of about 1.473 million units, and 6.8% below the permit rate from a year ago. February single-family home authorizations were at an annual rate of 992,000, 0.2% below the revised January figure of 994,000. Authorizations of units in buildings with five units or more were at an annual rate of 404,000.
The rate of homes being completed during February was at an annual rate of 1.592 million units, 4.0% below the revised January rate of 1.659 million units. It was also 6.2% below the rate of one year ago. Single-family homes completed in February were at an annual rate of 1.066 million, 7.1% above the revised January rate. The rate of homes being completed in buildings with five or more units reached the annual rate of 512,000.
First American Deputy Chief Economist Odeta Kushi said the smoothed single-family permits and starts data shows a modest positive trend, but there are headwinds that could hinder any positive momentum.
“Notably, builder sentiment dipped in March, hitting its lowest point since August. Optimism about single-family sales for the next six months remained flat and in the negative zone,” Kushi said.
