Housing Starts Dip In February With Challenges Ahead

Total housing starts in the United States dropped 1.5 percent in February from the month before to a seasonally adjusted rate of 1.6 million units, according to a monthly report released Wednesday by the Census Bureau and the Department of Housing and Urban Development. That is still 39.2 percent above February 2019 numbers

Single-family housing starts were 6.7 percent above January.

“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,” National Association of Home Builders Chairman Dean Mon said. “While these are solid numbers, the report is backward looking. Challenges lie ahead due to broad economic weakening stemming from the coronavirus crisis.”

Building permits for privately owned homes dropped even more at 5.5 percent below the January number, though still 13.8 percent above the February 2019 rate, the report said.

Single‐family authorizations in February were at a rate of 1 million units – 1.7 percent above the revised January figure of 987,000. Authorizations of units in buildings with five units or more were at a rate of 415,000 in February.

“As indicated by some of the softening in builder confidence in March, housing construction faces significant headwinds as we enter the spring season,” NAHB Chief Economist Robert Dietz said. “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.”