Both starts and permits had a dramatically poor showing in February, with housing starts posting their second lowest numbers on record (data began in 1949) and permits hitting an all-time low (data began in 1959), according to U.S. Census data released today.
“This was an awful report, perhaps the worst housing starts report ever,” Patrick Newport, U.S. economist at IHS Global Insight, wrote in a press release about the numbers.
Starts fell 22.5% to an annual rate of 479,000 in February. The drop was led by multifamily starts, which plunged 46.1% after their 77.7% surge in January. Single-family housing starts fell 11.8% from the previous month to an annual rate of 375,000, a number 28.8% below where it stood in February 2010.
The Midwest set a record low for the region after starts dropped 48.6% from January and 45.7% from the year before, reaching an annual rate of 57,000 units. The Northeast experienced the second largest drop, falling 37.5% from January and dropping 23.6% from February 2010 to an annual rate of 55,000. The West dropped 28.0% for the month and 40.6% year-over-year, to an annual rate of 85,000 units.
While the South was down 6.3% in February and 1.1% from the year before, it had the strongest showing in number of units with an annual rate of 282,000, more than twice that of any other region.
But Newport points to permits as the numbers to watch. “Permits are better measured than starts and less influenced by weather,” he wrote. “They are also a good housing-market leading indicator.”
Unfortunately, with a record low nationwide as well as all-time lows in the West and Northeast, those numbers offered little solace.
Overall, permits declined 8.2% from January and 20.5% year-over-year, reaching a rate of 517,000. Single-family permits declined 9.3% for the month, hitting an annual rate of 382,000—27.0% below where the rate stood a year earlier. Multifamily permits were down 4.9% with an annual rate of 135,000.
Permits were down in every region of the country, with the Northeast plunging 27.8% from January and 32.9% from the previous year, to an annual rate of 57,000. Single-family permits for that region stood at a rate of 40,000, down 21.6% and 41.2% on a monthly and yearly basis, respectively. However, Newport attributes that drop to building code changes in New York and Pennsylvania that became effective Jan. 1. The changing codes were responsible for a 50% increase in permits pulled in the Northeast in December, he notes.
The Midwest’s permits were down 5.4% overall for the month, a 17.9% decline on a yearly basis. The region’s annual rate stood at 87,000. Single-family permits for the region were down 7.8% for the month and down a dramatic 30.6% from the previous year, with an annual rate of 59,000.
The South was down 1.4% overall for the month, with permits down 10.6% year-over-year and an annual rate of 278,000. Single-family permits in the region were down 4.6% and 20.2% on a monthly and yearly basis, respectively, with an annual rate of 206,000.
The West saw a 13.6% decline in permits from January and was 35.8% below February 2010’s number. The region achieved an annual rate of 95,000. Single-family permits for the area were 14.4% lower on a monthly basis and off 31.3% on a yearly basis, with an annual rate of 77,000. However, this drop may also be fueled by recent California code changes that went into effect at the beginning of this year.
Claire Easley is senior editor, online, for Builder .
Learn more about markets featured in this article: Greenville, SC.