U.S. housing starts grew to a seasonally adjusted 946,000, fueled by growth in single-family homes, the Commerce Department said Wednesday. Starts for February were revised to 920,000, which is higher than previously reported. The median estimate of 78 economists polled by Bloomberg predicted an increase to 970,000.
Economists had expected warmer weather to reflect a stronger rebound in March. While warm weather did boost housing activity in the Northeast and Midwest, which grew 65.5 percent and 30.7 percent respectively, higher interest rates, slow wage growth and tight credit put home ownership out of reach for many buyers.
The number of permits, a bellwether for future construction projects, declined 2.4 percent in March to 990,000 from the previous month. This was the fourth drop in five months, but suggests that construction still has room to grow.
“Housing will contribute positively to GDP this year, but not by nearly as much as in 2012 and 2013,” said Dana Saporta, director of U.S. economics research at Credit Suisse in New York. “We are seeing continued improvement in housing starts, but at a slower pace.”
Construction of single-family homes grew six percent but construction of multifamily projects, such as condominiums and apartment buildings, fell 3.1 percent.
Economist shad predicted a pick-up in the housing sector come spring, after construction was affected by snowy weather this winter, which also affected sales.
[The Wall Street Journal]