U.S. new-home construction cooled by more than expected in February on a reversal among multi-family homes, while building remained on pace to contribute to economic growth this quarter.
Figures released Friday by the U.S. Commerce Department showed residential starts fell 7% to a 1.24-million annualized rate (est. 1.29m) after 1.33 million pace in prior month
Single-family home starts rose 2.9%, second straight gain; multi-family starts fell 26.1% after similar jump the prior month
Permits, a proxy for future construction of all types of homes, fell 5.7% to 1.3 m rate (est. 1.32 m) from 1.38 m pace
Even as the numbers went down last month, 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 remain historically low despite recent increases and consumer confidence is elevated as tax cuts aid disposable income.
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 be a good sign for buyers, as the lack of inventory in recent years has helped reduce affordability.
