March Housing Starts: Still No Momentum

• March housing starts fell 0.3% from February and 14.2% from a year ago, to 1.14 million units (SAAR) according to the Census Bureau—their lowest level since May 2017.  Single-family starts dropped 0.4% from February and 11% from a year ago; multifamily starts were down 3.4% month-over-month and down 21.8% year-over-year.
n• Housing permits fell 1.7% from February and were down 7.8% from a year ago.
n• National housing completions dropped 1.9% from February but climbed 6.8% from a year earlier.

Housing starts continue to flounder following hard knocks over a winter marked by the partial government shutdown and brutal weather. The Midwest had the largest declines, likely attributable to the floods that part of the country has experienced. This lackluster March report is a surprise, with housing starts still not regaining the momentum expected from lower interest rates, a strong labor market and other bullish economic signals.

In an industry that maneuvers with the deliberation of a big tanker, it can take a while for builders' confidence in the market to appear as housing starts. The March numbers show better economic conditions still are not bearing fruit for builders as the market turns toward the spring home shopping season.