Housing Starts Take February Dive
Privately-owned housing starts dropped 17% in February, dropping to a seasonally adjusted annual rate of 897,000, compared to the revised January estimate of 1,081,000. This is 3.3% lower than last year's level of starts which, at the time, were attributed in part to the polar vortex. Single-family starts dropped 14.9 percent, according to the HUD/Census Bureau data, coming in at 593,000, compared to January's revised 697,000 starts.
Weather undoubtedly played a role. But even if this is temporary, the impact was still nationwide: Combined single- and multifamily starts decreased in all regions of the country, with the Northeast, Midwest, South and West posting respective declines of 56.5 percent, 37 percent, 2.5 percent and 18.2 percent.
However, economists at the NAHB and Portland Cement Association, among others, say the underlying fundamentals of positive job creation and household formations will drive demand, and that there is pent-up demand. “February’s numbers indicate that wavering consumer confidence continues to impact the housing recovery,” said NAHB Chief Economist David Crowe. “Buyers are waiting for a stronger, more reliable economy before making a home purchase, and builders are responding to their reluctance. Even with this month’s drop in production, we expect the housing market to move forward this year in step with an improving economy.” (NAHB news release.)
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