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Housing starts declined 6.8 percent to a seasonally
adjusted annual rate of 1.22 million units, the Commerce
Department said on Tuesday. February's starts were revised up to
a 1.30 million-unit pace from the previously reported 1.29
million-rate.
Economists polled by Reuters had forecast groundbreaking
activity falling to a 1.25 million-unit pace last month.
Homebuilding was up 9.2 percent compared to March 2016.
Construction in February was boosted by unseasonably warm
temperatures. But temperatures dropped in March and a storm
lashed the Northeast and Midwest regions, which could have
accounted for the drop last month in homebuilding.
Single-family homebuilding, which accounts for the largest share
of the residential housing market, fell 6.2 percent to a 821,000
unit-pace last month. Single-family starts in the Midwest
declined 35 percent, the largest drop since January 2014, to
their lowest level since August 2015.
Single-family starts in the Northeast were unchanged. They rose
3.2 percent in the South, but fell 5.5 percent in the West.
Last month, starts for the volatile multi-family housing segment
dropped 7.9 percent to a 394,000 unit-pace.
Pointing to underlying strength in the housing market, building
permits increased 3.6 percent, driven by a 13.8 percent surge in
the multi-family segment.
While single-family permits fell 1.1 percent, they were not too
far from the more than nine-year high reached in February.
A tightening labor market, which is generating steady wage
growth is underpinning the housing market. The sector, however,
remains constrained by a dearth of properties available for
sale.
Builders have, however, failed to bridge the gap, citing a range
of problems including shortages of labor and land as well as
rising material prices. A survey on Monday showed homebuilders
confidence slipped in April from a near 12-year high in March.
Still, measures of current sales and sales expectations remained
at lofty levels.
(Reporting By Lucia Mutikani)
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