New-home construction cooled by more than expected in February on a reversal in the volatile multifamily category, while building remained on pace to contribute to economic growth this quarter.
Residential starts fell 7% in February to a 1.24 million annualized rate (the estimate had been for 1.29 million starts) after a 1.33 million pace
Even with February's decline, the results indicate homebuilding is continuing the progress made last year, with demand supported by a tight job market and steady pay gains. Mortgage rates
The report indicated a tight supply of homes is getting an influx: The number of housing units completed rose to a 1.32 million annualized rate, the highest in 10 years. That may bode well for buyers, as the lack of inventory in recent years has helped reduce affordability.
A gauge of homebuilders' confidence eased to
Single-family home starts rose to a 902,000 rate, the highest in three months, from 877,000 one month earlier. Groundbreaking on multifamily homes, such as apartment buildings and condominiums, fell to an annual rate of 334,000; however, data on these projects can be volatile.
Three of the four regions posted a decline in starts, led by the West and the South. Only in the Midwest was there an increase. The report shows a wide confidence interval, with a 90% chance that the January figure for starts ranged from a 23.7% drop to a 9.7% gain. The housing starts report is released jointly by the Census Bureau and Department of Housing and Urban Development.