WASHINGTON, DC - Housing starts fell 10.8% in March to a seasonally adjusted annual rate of 510,000 from 572,000 in February. It's the second-lowest rate since the 1940s. January's 488,000 pace remains the post-war low. It was much weaker than the 550,000 annual rate expected by economists. Meanwhile, building permits dropped 9% to a 513,000 seasonally adjusted annual pace, the lowest on record. Permits for single-family homes fell 7.4% to a 361,000 annual rate, the second-lowest on record.
Starts are down 48% in the past 12 months and are down 78% from the peak three years ago. Building permits are down 45% in the past year.
The large increase in housing starts in February, which has now been revised down to 17% from the 22% gain originally reported, was lauded by policymakers from Ben Bernanke to Barack Obama as a tentative sign that the pace of economic decline might be easing.
The March housing data buries that green shoot of hope.
The drop in housing starts in March was entirely due to the volatile multifamily sector, which fell 29% in March after rising 62% in February. Starts for single-family homes were unchanged in March at a 358,000 rate, just above the record-low of 356,000 set in January.
The mood of home builders improved in April, but remained gloomy. The National Association of Home Builders reported Wednesday that its sentiment index rose from 9 in March to 14 in April on a scale of 1 to 100.
The government cautions that its monthly housing data are volatile and subject to large sampling and other statistical errors. In most months, the government can't be sure whether starts increased or decreased. In March, for instance, the standard error for starts was plus or minus 11.6%. Large revisions are common.
It can take four months for a new trend in housing starts to emerge from the data. In the past four months, housing starts have averaged 532,000 annualized, down from 568,000 in the four months ending in February.
Source: MarketWatch.com