February Housing Starts Down After Single-family Surge in January

Window & Door
March 26, 2019
Markets

Total housing starts fell 8.7 percent in February to a seasonally adjusted annual rate of 1.16 million units from an upwardly revised reading in January, according to a report from the U.S. Housing and Urban Development and Commerce Department.

The February reading of 1.16 million is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts fell 17 percent to 805,000 units following an unusually high reading of 970,000 units in January.

"The overall lower starts numbers are somewhat deceiving given the revised single-family starts figure in January was at a post-recession high," says Danushka Nanayakkara-Skillington, assistant vice president for forecasting and analysis at the National Association of Home Builders. "Absent the surge last month, the drop in single-family production in February is not as huge as it appears. Still, builders continue to remain cautious due to affordability concerns, as illustrated by the flat permits data."

"The February starts figures are somewhat in line with flat builder expectations and serve as a cautionary note that affordability factors continue to affect the marketplace," says Greg Ugalde, chairman of NAHB. "Excessive regulations, a scarcity of buildable lots, persistent labor shortages and tariffs on lumber and other key building materials are having a negative effect on housing affordability."