Starts Up, Permits Down In February

Residential construction rebounded by more than expected in February, but the boom may not last.

Housing starts were up 11.2% from January to 1.5 million annual pace, much higher than analysts predicted, according to new data from the U.S. Census Bureau.

Meanwhile, new construction of single-family homes jumped 11.4% to a 1.11 million rate, the fastest in a year.

The upward bump is largely supported by increases in the Northeast and South, which were crippled by significant snowfall in January. Builders are moving to make up for lost time.

Permits declined, however, by 1.2% from the month prior to a 1.46 million rate. Permits act as an indicator of future construction.

“January’s dramatic drop in housing starts, largely driven by exceptionally cold weather, reversed in February, but a decline in housing permits tempered the optimism. Looming tariffs are creating considerable uncertainty about construction costs, limiting activity,” Bloomberg economist Eliza Winger commented.

The National Association of Home Builders has released its March Housing Market Index, which showed builder confidence plummeting. Economic uncertainty, the threat of tariffs, and elevated construction costs were to blame.