Housing starts took an unexpected turn southward, falling 8.8% from February to a seasonally adjusted annual rate of 1,089,000, the Commerce Department reported Monday. Analysts polled by Econoday were expecting a rate of 1.167 million.
Similarly, permits took a dive, down 7.7% from February to a rate of 1,086,000, missing analyst expectations of 1.2 million. Single-family housing starts fell even further, down 9.2% a rate of 764,000. However, both starts and permits remained above year-ago levels, with the former 14.8% ahead and permits up 4.6% from March, 2015. Single family starts remained 22.6% higher than March of last year.
The single-family starts numbers declined across the board regionally, suggesting some softening in the market for new homes after a robust 2015. However, the biggest declines were in the Midwest, which saw all starts drop 25.4% from February to a rate of 150,000 units and single-family starts fall 21.2% to 123,000, suggesting harsh weather may have been a factor. Also bolstering that view was the permit data. In the Midwest, total permits fell only 3.1% to 185,000 and single-family permits were down 3.2% to a rate of 120,000. Those numbers were still ahead of March 2015 by 24.2% and 21.2%, respectively.
While overall starts in the Northeast shot up 61.3% to 121,000 (21% higher than 2015), all that increase and more was due to multi-unit housing. Single family starts were down 8.6% to a rate of 53,000, up 20.5% from last year. Permits, however, fell 17.9% to 185,000, 21.7% behind the 2015 pace, while single-family permits were flat at 52,000, up 23.8% from March 2015.
Starts in the South overall were down 8.4% to 555,000, up 8.6% from last March, with single-family down 4.9% to 409,000, 17.5% ahead of last year's pace. Permits overall were down 3.2% to 552,000, 11.3% ahead of last March, with single-family up 1.8% to 390,000, a 10.8% gain over March 2015.
Starts in the West overall dropped 15.7% to 263,000, 30.8% ahead of last March, with single-family down 9.1% to 179,000, still 24.3% ahead of the same month a year ago. Permits were down 15.4% overall to 248,000, down 6.1% from last March, with single-family down 6.8% to 165,000, a 10.7% increase from last year.
Privately-owned housing completions in March were at a seasonally adjusted annual rate of 1,061,000, 3.5% above the revised February estimate of 1,025,000 and 31.6% above the March 2015 rate of 806,000. Single-family housing completions in March were at a rate of 734,000, 0.3% below the revised February rate of 736,000. The March rate for units in buildings with five units or more was 316,000.