U.S. housing starts slowed dramatically in February, falling 17% to 897,000, reports CIBC World Market Economics. But the decline in builds was due to adverse weather.
“The regional breakdown showed that the Northeast and Midwest saw big declines, although starts were also lower in less weather-impacted areas as well,” says Andrew Grantham of CIBC World Market Economics. “A strengthening in permit applications also bodes well for a rebound in building activity when the weather improves.”
Permit applications rose, although the upturn was driven solely by multiple housing starts. Single-family permit applications fell 6.2%, and were only modestly higher on a year-over-year basis.
“The likely impact of bad weather on starts and the firmer permit figures should limit market reaction to today’s numbers,” he says.
In addition, U.S. homebuilders are feeling slightly less confident in their sales prospects, even as their overall sales outlook remains favourable.
The National Association of Home Builders/Wells Fargo builder sentiment index slipped this month to 53, down two points from 55 in February. It’s the third monthly decline in a row for the index. Readings above 50 indicate more builders view sales conditions as good, rather than poor.
Builders’ view of current sales conditions and traffic by prospective buyers declined. Their outlook for sales over the next six months held steady.