Total housing starts declined in February, led by a reversion to trend for multifamily development. Starts fell 7% to a 1.24 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD.
The pace of single-family starts expanded in February, rising 2.9% to a 902,000 seasonally adjusted annual rate. The three-month moving average for single-family starts remained near a post-recession high rate of construction (875,000). The gains for single-family starts match ongoing healthy levels of the NAHB/Wells Fargo Housing Market Index, now registering a score of 70. Single-family permits were effectively unchanged in February, declining 0.6%.
Multifamily starts were down 26%, reverting to trend at a 334,000 annual rate after a surprisingly strong January. Multifamily permits also posted a decline in February, with permitting falling almost 15% for the month. Multifamily data tends to be volatile in the month-to-month data.
With respect to housing’s economic impact, 55% of homes under construction in February were multifamily (614,000). With production declines in 2017, the current count of multifamily units under construction is just slightly lower than a year ago (625,000). In February, there were 501,000 single-family units under construction, a gain of almost 10% from this time in 2017.