Steel Markets

Housing Starts and Permits Drop in February

March 18, 2018

Housing starts fell 7.0 percent in February, driven by a 26 percent plunge in multifamily housing construction, according to data from the Department of Commerce. Total housing starts were at a seasonally adjusted annual rate of 1.24 million units. Single-family housing starts rose 2.9 percent in February to a rate of 902,000.

House2018 “The uptick in single-family production is consistent with our builder confidence readings, which have been in the 70s for four consecutive months,” said National Association of Home Builders Chairman Randy Noel. “However, builders must manage rising construction costs to keep home prices competitive.” A recent survey by NAHB showed builder confidence down one point to an index reading of 70 in March.

Regionally in February, combined housing starts increased 7.6 percent in the Midwest. Starts fell 3.5 percent in the Northeast, 7.3 percent in the South and 12.9 percent in the West.

Permit authorizations, a measure of future construction, were down 5.7 percent from January due to a 14.8 percent decline in multi-family authorizations. Permit authorizations for single-family homes dropped 0.6 percent to a rate of 872,000.

Overall permit authorizations rose 12.7 percent in the Northeast and 3.4 percent in the Midwest, but declined 3.4 percent in the West and 12.4 percent in the South.

“Some multifamily pullback is expected after an unusually strong January reading. Multifamily starts should continue to level off throughout the year,” said NAHB Chief Economist Robert Dietz. “Meanwhile, the growth in single-family production is in line with our 2018 forecast for gradual, modest strengthening in this sector of the housing market.”