The pace of home building south of the border fell in March to its lowest level since October, another sign momentum in the housing market is slowing after a strong 2015.
The monthly fallback retraces some of February’s gains, leaving the overall trend for the first quarter largely flat compared to the previous year’s pace.
The U.S. Commerce Department reported Tuesday that housing starts fell 8.8% from a month earlier to a seasonally adjusted annual rate of 1.089 million in March.
The monthly slides erases most of February’s gains, leaving the overall trend for the first quarter largely flat compared with the previous year’s pace.
Much of the slowdown was concentrated in the Midwest, while groundbreaking on new homes picked up in the Northeast, suggesting that some of March’s mixed performance was weather-driven. Several economists noted that the timing of Easter, which came in March this year, could have dampened the numbers.
New applications for building permits, a bellwether for forthcoming construction, fell 7.7% to 1.086 million, from a revised February rate of 1.177 million.
Home-starts figures are volatile and often revised. Tuesday’s report showed new-home starts revised up to 1.194 million in February, compared with an initial estimate of 1.178 million. March’s figure came with a margin of error of plus or minus 11.1 percentage points.
Demand for housing has been strong over the past year, with home prices up in many markets amid a shortage of inventory. Buyers could turn to new homes, which only make up about 10% of the overall housing market, as the supply of existing homes shrink.
Despite this past month’s decline from February, figures for March still showed improvement from the prior year. Housing starts in March stateside were 14.2% higher than in March last year, and permits were up 4.6% from a year before. For the first three months of the year, housing starts are up 14.5% compared with the same period the year before.
