Steel Markets

Housing Starts Slide in March

April 19, 2016

Housing starts plummeted in March, according to Commerce Department data. Housing starts fell 8.8 percent to a seasonally adjusted annual rate of 1,089,000, well below economist projections. Housing permit authorizations also declined in March by 7.7 percent, indicating a cooling of momentum during the housing construction market’s busiest season.

Single family housing starts were at rate of 764,000 and 9.2 percent below February’s revised estimate. Single-family permit authorizations dropped 1.2 percent from February.

Construction of structures with five or more units also declined, dropping 8.6 percent from February. Permit authorization for the category fell 20.6 percent from the previous month.

Regionally, total housing starts increased in the Northeast by 61.3 percent but fell by double digit percentages in the Midwest and West and by 8.4 percent in the South. Single family housing starts slid in all four regions. Likewise permit authorizations fell in all four regions.

The slump in housing data goes along with an unchanged index for home builder sentiment in April. Builder confidence for the single family housing sector was at 58 for the past three months, indicating a slow but consistent recovery for the sector.

“Single-family starts are off from their strong showing in February but this slowdown represents a return to a long-run, gradual growth trend that is consistent with builder confidence levels, which are overall positive,” said NAHB Chief Economist Robert Dietz. “While we are also seeing a monthly decline on the multifamily front, multifamily construction is expected to level off at a solid rate given the high level of rental housing demand.”