Privately owned housing starts increased in February, largely due to an increase in the multifamily market. Private starts in February were at a seasonally adjusted annual rate of 1,450,000 million, 9.8% above the revised January estimate of 1,321,000 million but 18.4% below the February 2022 level of 1,777,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
“We will watch for downward revisions next month, as today’s reading in the multifamily market is contrary to what we’ve heard on the ground,” says Zonda chief economist Ali Wolf. “The modest increase in single-family housing starts month over month is more in line with what we are hearing. A stronger than expected start to the year for the housing market is encouraging builders to start more homes to better match demand.”
Single-family housing starts in February were at a seasonally adjusted annual rate of 830,000, a 1.1% increase from the revised January figure. The February rate of starts for units in buildings with five units or more was 608,000 in February.
“Lower mortgage rates led to an uptick in home buyer traffic and sales in January and the early part of February,” Fitch Ratings senior director Robert Rulla says. “However, the subsequent increase in mortgage rate levels and volatility will likely weaken home buyer demand and builder sentiment, pressuring starts during the balance of the year.”
Housing units authorized by building permits in February increased 13.8% on a month-over-month basis to a seasonally adjusted annual rate of 1,524,000. The estimate is 17.9% below the February 2022 rate of 1,857,000. Single-family authorizations in February increased 7.6% from January estimates to 777,000 in February. Authorizations of units in buildings with five units or more were at a rate of 700,000 in February.
February’s housing completions were at a seasonally adjusted annual rate of 1,557,000, a 12.2% increase from the revised January estimate and 12.8% above February 2022 levels. Single-family completions increased 1% from the revised January rate to 1,037,000 in February. The rate for units in buildings with five units or more was 509,000.