Housing starts see biggest collapse since January 2007
Devastating 17 percent monthly drop hits industry.
Glitch or evil omen? You decide. Privately-owned housing starts in February plummeted 17%, down to an annualized 897,000 from the revised January estimate of 1,081,000, with drops in the Northeast, Midwest and West leading the collapse.
Single-family housing starts in February were at a rate of 593,000; this is 14.9% below the revised January figure of 697,000.
Multi-family starts are the lowest since June 2014.
“Housing clearly remains under pressure. Increased volatility month to month has left permits and starts little changed from levels reached 12-24 months ago,” said Lindsey Piegza, chief economist for Sterne Agee. “With consumers struggling amid minimal wage growth, housing is unlikely to be a sizable contribution to headline growth in the near term.
“Nevertheless, the disappointment in this morning's report only further exacerbates the downward trend in the economic data as of late. Needless to say, the Fed has plenty to discuss at this week's policy meeting,” she said.
The collapse was dominated by the Northeast which saw a -56.5% drop and in the Midwest, which collapsed -37%.
“There’s no question that the harsh winter we had in the Midwest and Northeast was the culprit in February’s slowdown in new home construction,” said Quicken Loans Vice President Bill Banfield. “I wouldn’t look too much into February’s drop, as the overall housing picture shows homebuilder confidence growing and permits for new construction rising. Look for demand to increase in the coming months.”
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Source: HousingWire.com
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