U.S. homebuilding increased more than expected in March amid a rebound in the construction of multi-family housing units, but weakness in the single-family segment suggested the housing market was slowing.
Figures released Tuesday by the U.S. Commerce Department showed housing starts rose 1.9% to a seasonally adjusted annual rate of 1.319 million units. Data for February was revised up to show groundbreaking declining to a 1.295 million-unit pace instead of the previously reported 1.236 million units.
Economists had forecast housing starts rising to a pace of 1.262 million units last month. Permits for future home building rose 2.5% to a rate of 1.354 million units in March.
U.S. financial markets were little moved by the data.
Despite the rebound in homebuilding last month, activity appears to be slowing. Single-family homebuilding, which accounts for the largest share of the housing market, fell 3.7% to a rate of 867,000 units in March.
Demand for housing is being driven by a robust labour market, which is underpinning the economy. Despite jobs market strength, wage inflation has remained moderate.
Single-family home construction fell in the Northeast, South and West, but rose in the Midwest. Permits to build single-family homes dropped 5.5% in March to an 840,000 unit-pace, the lowest level since September 2017.
