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Housing Starts Peaked Again in February
The appeal of homeownership drove single-family housing starts to a new all-time record last month and buoyed the construction of multifamily condominiums.
Total housing starts increased 0.5% to a seasonally adjusted annual rate of 2.195 million units, their highest level in 21 years and 15.8% above a year earlier, the U.S. Commerce Department reported on March 16.
“Builders are reporting that there is still plenty of traffic in their sales offices,” said NAHB President Dave Wilson. “Mortgage rates, employment, household income and other favorable market conditions continue to drive demand.”
“Homeownership continues to plow ahead,” said NAHB Chief Economist David Seiders. “Builders are reacting to strong demand in the single-family home and condominium markets, both of which continue to cry out for supply. Stronger job prospects also are fueling the rental market.”
The rate of single-family home construction reached a second consecutive monthly record of 1.775 million units in February, which was 0.3% above January’s pace and 16.7% higher than last February.
Multifamily housing starts increased 1.7% to a seasonally adjusted rate of 420,000 units last month, 12.3% higher than a year earlier.
“It’s perfectly clear that housing will remain an important component of GDP for the first quarter of the year. There’s no question that the housing market is still an engine of economic growth,” Seiders said. “However, we do expect housing to plateau as the year progresses, other components of the economy pick up more steam and the interest rate structure moves up further.”
Regionally, starts were up 20.4% in the Midwest and 19.1% in the Northeast, both of which were battered by winter storms in January. Housing production climbed 0.7% in the West and declined 8.1% in the South following an 18% surge the month before.
Issuance of total building permits decreased 2.7% from January’s robust pace to a seasonably adjusted annual rate of 2.074 million units.
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