After last month’s horrendous report on Housing Starts and Building Permits for the month of February, March’s report was not much better. Economists were expecting Housing Starts to rebound to a SAAR of 1.04 million from February’s upwardly revised reading of 908K, but the actual level showed only modest improvement, rising to 926K. Going all the way back to 2000, the last two months are the first time that Housing Starts have missed consensus forecasts by more than 100K in back to back months. March’s report for Building Permits wasn’t nearly as bad. Economists were expecting a SAAR of 1.081 million units, but the actual level was 1.039 million. Keep in mind, however, that this is still March data we are looking at, and we would expect to see some positive payback in the April data now that the snow has melted, especially given Wednesday’s improvement in home builder sentiment for April.
The table below breaks out March’s report by type of unit and region. Looked at in this way, there are a couple of silver linings to the report. For starters, both starts and permits for single-family units were stronger than the headline reading and also showed growth. Single-family units are thought to have a greater economic impact than multi-family units, so at least whatever strength we are seeing has been in the right places. On a regional basis, Housing Starts and Building Permits in the Northeast saw big gains (albeit off a small base). For Starts, we saw m/m growth of over 100%, while permits increased by nearly 40%. Since weather had the greatest impact on the northeast, it is good to see some snap back here, and we would expect to see a continued rebound in April’s data next month. More puzzling, however, is that starts in the West dropped by 19% m/m, while every region except the northeast saw a m/m decline in permits.