Housing Starts Fall in February


Total housing starts posted a 8.7 percent decrease in February (1.162 million units) compared to a upwardly revised January estimate of 1.273 million units according to the joint data release from the Census Bureau and HUD. Relative to February 2018, total starts are 9.9 percent below the annual pace of 1.29 million units.

The rate of single-family starts posted a monthly decline in February, decreasing 17.0 percent to a seasonally adjusted annual rate of 805,000. January single-family starts were revised up to 970,000 units, which is a post-recession high. The three month moving average for single-family in February is 863,000 units. The January surge reflected an increase after weakness and caution in the Fall of 2018.

On a year-to-date basis, single-family starts are 2.3 percent lower as of February relative to the first two months of 2018. Single-family permits, a useful indicator of future construction activity, were flat at 821,000 units in February and have registered a 7.3 percent loss thus far in 2019 compared to last year. This is in line with the NAHB/Wells Fargo Housing Market Index, which held builder confidence in the market for newly-built single-family homes steady at 62 in March but remains lower on a year-over-year basis.

Multifamily starts (2+ unit production) posted an increase of 17.8 percent in February to a 357,000 annual rate. After a slow start to the year, multifamily development is moving closer to our forecast of leveling-off conditions. On a year-to-date basis, multifamily 5+ unit production is down 20.3 percent thus far in 2019, while multifamily 5+ unit permitting is trending higher with an increase of 9.0 percent compared to January.

Regional data show, on a year-to-date basis positive conditions for single-family construction in the South (+4.5 percent), Northeast (+1.8 percent), and the Midwest (+0.5 percent).  However, single-family construction is down 19.0 percent in the West.

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