Housing Starts Fall Sharply

Data on the housing sector are slowing going into the key spring season. Housing starts fell a very sharp 8.8 percent in March to a 1.089 million annualized rate which is well below Econoday's consensus for 1.167 million and below the low estimate for 1.120 million. Permits are showing similar weakness, down 7.7 percent at a 1.086 million rate which is likewise below both the consensus and low estimate. Weakness in starts is split roughly evenly between single-family and multi-family components with weakness in permits concentrated in the multi-families. Nevertheless, there is fundamental strength in the year-on-year rates, at plus 14.2 percent for starts and a less spectacular plus 4.6 percent for permits. Spring is the season that those in the housing sector count on, but momentum definitely is not building.

Recent History Of This Indicator:
Housing starts & permits have swung sharply in recent reports including a big upswing for starts in February together with a big downswing for permits. Forecasters are calling for a reversal in March, a 0.9 percent dip for starts to a 1.167 million annualized pace and a 2.8 percent gain for permits to a 1.200 million rate. A gain for permits, especially one centered in single-family homes, could lift the outlook for what has been an underperforming housing sector.