Steel Markets

Housing Construction Slips in February

March 18, 2020

Housing starts dipped 1.5 percent from January to February to a seasonally adjusted annual rate of 1,599,000, but were 39.2 percent higher than a year ago, according to a report from the U.S. Housing and Urban Development and Commerce Department. Single-family housing starts jumped 6.7 percent in February to 1,072,000 while starts for housing with five units or more fell 27 percent.

House2018 “Housing starts were strong at the outset of 2020, as builders started production of homes to meet consumer demand at the beginning of the year,” said NAHB Chairman Dean Mon. “While these are solid numbers, the report is backward looking. Challenges lie ahead due to broad economic weakening stemming from the coronavirus crisis.”

Regionally the greatest sequential growth was in the Midwest at 16.7 percent, followed by the South at 15.2 percent. Starts plummeted 41.4 percent in the Northeast and 18.2 percent in the West.

Building permits, a predictor of future construction, were at a seasonally adjusted annual rate of 1,464,000 in February. Permits were down 5.5. percent from January, but up 13.8 percent from a year ago.

“As indicated by some of the softening in builder confidence in March, housing construction faces significant headwinds as we enter the spring season,” said NAHB Chief Economist Robert Dietz. “With a rising number of economic sectors on a partial or full pause due to coronavirus mitigation, housing demand and the ability to continue full construction of homes is at significant risk.”

Single‐family authorizations in February increased 1.7 percent to a rate of 1,004,000. Authorizations of units in buildings with five units or more fell 20.2 percent to a rate of 415,000 in February.

Regionally, starts declined across the board: Northeast, -25.1 percent; Midwest, -8.2 percent; South, -1.6 percent; and West, -2.5 percent.