US housing starts decreased 6.8% in March from the prior month to a seasonally adjusted annual rate of 1.215 million, the Commerce Department said Tuesday.
Construction in February had been supported by warmer-than-usual weather, and so the cool down in March was expected to affect homebuilding.
Single-family homebuilding, which accounts for the largest share of the residential housing market, fell 6.2 percent to a 821,000 unit-pace last month. "Homebuyers should rest assured that new home building will continue to relieve their supply constraint in the long-run". This is 3.6% above the revised February rate of 1,216,000 and is 17.0% above the March 2016 rate of 1,077,000. Starts of multifamily dwellings (five units or more per building) were at a rate of about 385,000, a decrease of 6.1% compared with 410,000 in February. Authorizations of units in buildings with five units or more were at a rate of 401,000 in March.
Starts fell in March for both single-family and multifamily construction. The National Association of Home Builders/Wells Fargo builder sentiment index released Monday dipped to 68 this month from 71 in March.
More properties will likely begin construction in the coming months. Readings above 50 indicate more builders view sales conditions as favorable rather than poor.
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But strengthening demand and builder sentiment have yet to generate enough construction to sufficiently boost the availability of homes.
There were 266,000 new homes for sale last month, up almost 10 percent from a year earlier.
Regionally, overall permits rose 16.7 percent in the West, 15.5 percent in the Northeast and 6 percent in the South. Permits fell 22 percent in the Midwest.
Purchases of existing homes have also increased.
While single-family permits fell 1.1 percent last month, they were not too far from the more than nine-year high reached in February.