Housing Starts Fell 5.9% in February

Posted Mar 16th 2010 9:30AM by Connie Madon
Filed under: Economic Data, Housing, Federal Reserve

The Commerce Department reported that housing starts fell 5.9% in February to 575,000. Building permits also fell in February. Economists surveyed by Bloomberg news had forecast starts to fall to between 510,000 to 610,000.

Much of the weakness can be blamed on the weather. You don't start new construction in the midst of snowstorms and blizzards. Also, with a backlog of unsold existing homes, it becomes more difficult start new constructions. Builders remain cautious of moving forward too rapidly.

Here is a breakdown of the stats:

New home construction barely budged, rising only 0.2% in February, from the same period last year.
Building permits declined 1.6% to 612,000, after a drop of 4.7% in January.
Construction of single family houses fell 0.6% to 499,000.
Multi-family homes, including townhouses and apartment buildings, fell 30% to an annual rate of 76,000. This is the lowest in four months.
By regions, the numbers are: South was down 16%, while the Northeast dropped 9.5%. Starts rose 11% in the Midwest and were up 7.9% in the West.
The number of homes under construction fell 2.2% in February to 492,000.
The Wells Fargo Builders' Confidence Index fell in March for the third straight month.

Overall, these numbers indicate a flat housing market. Predictions are that it will remain in the doldrums until employment numbers start rising.

In other matters, it is expected that the Fed will leave benchmark rates unchanged. The Fed is meeting Tuesday to review its interest rate policy.

Tags: building permits, Housing market, housing starts, HousingMarket, inthenews, new construction