Housing starts in February fell 8.7% to a seasonally adjusted annual rate of 1.162 million units from the revised January estimate of 1.273 million units, the Commerce Department reported.
The latest report is also 9.9% below the February 2018 rate of 1.323 million units.
Single‐family starts fell 17% in February to a rate of 805,000 units from the revised January figure of 970,000 units.
“The overall lower starts numbers are somewhat deceiving given the revised single-family starts figure in January was at a post-recession high,” said Danushka Nanayakkara-Skillington, AVP for forecasting and analysis at the National Association of Home Builders (NAHB). “Absent the surge last month, the drop in single-family production in February is not as huge as it appears. Still, builders continue to remain cautious due to affordability concerns, as illustrated by the flat permits data.”
By region, total starts tumbled nearly 30% in the Northeast, fell 19% in the West, and declined about 7% in the South. Although starts increased 26.8% in the Midwest, gains were largely from multi-family projects. Single-family starts also plummeted 42% in the Northeast.
“The February starts figures are somewhat in line with flat builder expectations and serve as a cautionary note that affordability factors continue to affect the marketplace,” said Greg Ugalde, chairman of NAHB and a home builder and developer from Torrington, Conn. “Excessive regulations, a scarcity of buildable lots, persistent labor shortages and tariffs on lumber and other key building materials are having a negative effect on housing affordability.”
Building permits in February were at a seasonally adjusted annual rate of 1.296 million units, down 1.6% from the revised January rate of 1,317 million units and 2% below the February 2018 rate of 1.323 million units.
Regionally, permits increased 1.5% in the Northeast, 4% in the South and 1.1% in the Midwest. Permits dropped 15% percent in the West, however.