The U.S. housing market continues to send mixed signals. For example, privately-owned housing starts in February grew at a seasonally adjusted annual rate of 1.162 million units, according to new data from the Census Bureau. That was an 8.7 percent decline from January’s upward-revised print and worse than anticipated. Essentially all of the weakness was due to a 17.0 percent plunge in single-family units last month, with big declines seen in every region of the country, while multi-family (rental) housing construction posted a double-digit gain.
As for building permits, this measure of future construction activity that is less influenced by the weather also disappointed forecasts, but the weakness here was concentrated in the rental arena. Looking ahead, homebuilder confidence continued to stabilize in March thanks to rising sales expectations. NAHB analysts, though, cautioned that the “skilled worker shortage, lack of buildable lots, and stiff zoning restrictions in many major metro markets are among the challenges builders face as they strive to construct homes that can sell at affordable price points.” On the bright side, existing home sales, which account for a significantly larger share of the overall housing market than new home sales, jumped by 11.8 percent in February. That was the largest monthly gain since 2015 and helped by “a powerful combination of lower mortgage rates, more inventory, rising income, and higher consumer confidence.”
Sources: Econoday, U.S. Census Bureau, NAHB, ZH, NAR, FRBSL
Post author: Charles Couch