Housing starts slip in February
Residential construction showed big year-over-year gains in February – a month untainted by the coronavirus - but starts were dragged down by sharp declines in new multi-family construction.
Meanwhile single-family starts produced the largest rate since June of 2007.
Still, total U.S. housing starts in February declined 1.5% to a seasonally adjusted annual rate of 1,599,000, compared to the upwardly revised January estimate of 1,624,000, the Commerce Department reported today. The latest figure for total starts is 39.2% above the February 2019 rate of 1,149,000.
Single‐family housing starts in February were at a rate of 1,072,000; which is 6.7% above the revised January figure of 1,005,000. Starts for buildings with five or more units fell 17% to 508,000 in February.
Housing permits fell 5.5% in February to a seasonally adjusted annual rate of 1,464,000 from the revised January rate of 1,550,000.
Permits are 13.8% above the February 2019 rate of 1,287,000, however.
Single‐family authorizations in February were at a rate of 1,004,000, edging up 1.7% above the revised January figure of 987,000. Permits for buildings with five or more units declined 20.2% in February.
But hurdles are on the horizon for home builders as the coronavirus has caused massive disruptions to the U.S. economy.
“Housing starts were strong at the outset of 2020, as builders started production of homes to meet consumer demand at the beginning of the year,” said Dean Mon, chairman of the National Association of Home Builders. "While these are solid numbers, the report is backward-looking. Challenges lie ahead due to broad economic weakening stemming from the coronavirus crisis.”
By region, here are some of the numbers from Wednesday's report:
• Northeast
Total starts in February plummeted 41.4% in the Northeast as single-family starts rose 3%.
Total permits dropped 25.1% as single-family permits grew 5.9%.
• Midwest
In the Midwest, total starts jumped 16.7% as single-family starts increased 4.9%.
Permits in were down 8.2% as single-family permits slipped 0.7%.
• South
Combined starts in the South are up 15.2% as single-family starts increased 18.5%.
Permits rose 1.6% as single-family permits declined 0.6%.
• West
The West saw total starts drop 18.2% as single-family starts fell 13.8%.
The region saw a 2.5% decline in total permits while single-family permits ascended 7.1%.
“As indicated by some of the softening in builder confidence in March, housing construction faces significant headwinds as we enter the spring season,” said NAHB Chief Economist Robert Dietz. “With a rising number of economic sectors on a partial or full pause due to coronavirus mitigation, housing demand and the ability to continue full construction of homes is at significant risk.”
Yesterday, the NAHB reported that builder confidence slipped two points in March to a level of 72, according to the latest NAHB/Wells Fargo Housing Market Index (HIM).
But half of the builder responses in the March HMI were collected prior to March 4, before the recent stock market declines and the rising economic impact of the coronavirus.
The full Monthly New Residential Construction report for February 2020 is available here.
Meanwhile single-family starts produced the largest rate since June of 2007.
Still, total U.S. housing starts in February declined 1.5% to a seasonally adjusted annual rate of 1,599,000, compared to the upwardly revised January estimate of 1,624,000, the Commerce Department reported today. The latest figure for total starts is 39.2% above the February 2019 rate of 1,149,000.
Single‐family housing starts in February were at a rate of 1,072,000; which is 6.7% above the revised January figure of 1,005,000. Starts for buildings with five or more units fell 17% to 508,000 in February.
Housing permits fell 5.5% in February to a seasonally adjusted annual rate of 1,464,000 from the revised January rate of 1,550,000.
Permits are 13.8% above the February 2019 rate of 1,287,000, however.
Single‐family authorizations in February were at a rate of 1,004,000, edging up 1.7% above the revised January figure of 987,000. Permits for buildings with five or more units declined 20.2% in February.
But hurdles are on the horizon for home builders as the coronavirus has caused massive disruptions to the U.S. economy.
“Housing starts were strong at the outset of 2020, as builders started production of homes to meet consumer demand at the beginning of the year,” said Dean Mon, chairman of the National Association of Home Builders. "While these are solid numbers, the report is backward-looking. Challenges lie ahead due to broad economic weakening stemming from the coronavirus crisis.”
By region, here are some of the numbers from Wednesday's report:
• Northeast
Total starts in February plummeted 41.4% in the Northeast as single-family starts rose 3%.
Total permits dropped 25.1% as single-family permits grew 5.9%.
• Midwest
In the Midwest, total starts jumped 16.7% as single-family starts increased 4.9%.
Permits in were down 8.2% as single-family permits slipped 0.7%.
• South
Combined starts in the South are up 15.2% as single-family starts increased 18.5%.
Permits rose 1.6% as single-family permits declined 0.6%.
• West
The West saw total starts drop 18.2% as single-family starts fell 13.8%.
The region saw a 2.5% decline in total permits while single-family permits ascended 7.1%.
“As indicated by some of the softening in builder confidence in March, housing construction faces significant headwinds as we enter the spring season,” said NAHB Chief Economist Robert Dietz. “With a rising number of economic sectors on a partial or full pause due to coronavirus mitigation, housing demand and the ability to continue full construction of homes is at significant risk.”
Yesterday, the NAHB reported that builder confidence slipped two points in March to a level of 72, according to the latest NAHB/Wells Fargo Housing Market Index (HIM).
But half of the builder responses in the March HMI were collected prior to March 4, before the recent stock market declines and the rising economic impact of the coronavirus.
The full Monthly New Residential Construction report for February 2020 is available here.