U.S. Housing Starts Tumble To Lowest Level In Over A Year In February

(RTTNews) - New residential construction in the U.S. showed a substantial decrease in the month of February, according to a report released by the Commerce Department on Tuesday, with housing starts falling to their lowest level in over a year.

The report said housing starts plummeted by 17.0 percent to an annual rate of 897,000 in February from the revised January estimate of 1.081 million.

Economists had been expecting housing starts to dip to 1.048 million from the 1.065 million originally reported for the previous month.

With the much bigger than expected decrease, housing starts fell to their lowest level since hitting a matching rate in January of last year.

The steep drop in housing starts reflected notable decreases in new construction of both single-family and multi-family homes.

Single-family starts tumbled by 14.9 percent to a rate of 593,000 in February from a rate of 697,000 in January, while multi-family starts plunged by 20.8 percent to a rate of 304,000 from a rate of 384,000.

Reflecting the rough winter weather, the report showed that housing starts in the Northeast region plummeted by 56.5 percent to a rate of 47,000.

On the other hand, the Commerce Department said building permits climbed 3.0 percent to an annual rate of 1.092 million in February from the revised January rate of 1.060 million.

Building permits, an indicator of future housing demand, had been expected to inch up to 1.058 million from the 1.053 million originally reported for January.

The increase in building permits reflected a jump in multi-family permits, which surged up by 18.3 percent to a rate of 472,000 in February from a rate of 399,000 in January.

Meanwhile, the report said single-family permits fell by 6.2 percent to a rate of 620,000 in February from a rate of 661,000 in the previous month.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the single family housing market remains in the doldrums relatively speaking. Single-family starts of 593,000 compares with the 35-year average of 1.025 million."

He added, "Multi-family is where the secular trends are pointing to as the 304,000 start level in February is about in line with the 35-year average of 344,000."

On Monday, the National Association of Home Builders released a separate report showing that homebuilder confidence fell to its lowest level in eight months in March.

The report said the NAHB/Wells Fargo Housing Market Index fell to 53 in March from 55 in February. The drop surprised economists, who had expected the index to inch up to 56.

With the unexpected decrease, the housing market index fell to its lowest level since hitting a matching reading last July.