Housing starts in the United States were little changed in February after declining less than previously estimated a month earlier, indicating the home-building industry is stabilizing after bad winter weather curbed construction.
The 0.2% decrease to 907,000 homes at an annualized rate last month followed a revised 909,000 pace in January, Commerce Department figures showed March 18. The median estimate in a Bloomberg survey called for a 910,000 rate after a previously reported 880,000 in January.
Warmer temperatures, a pickup in demand during the spring selling season and limited housing supply may help fuel further gains in new residential construction. The outlook for the industry later this year depends on whether hiring picks up enough to overcome higher mortgage rates and home prices.
“We will see improvement as the year goes on and weather improves,” said David Sloan, a senior economist at 4cast Inc. in New York and the top-ranked forecaster of starts in the past two years, according to data compiled by Bloomberg. “The pace of increase will be fairly moderate. It suggests we’re going to get respectable economic growth but maybe not a strong acceleration.”
Estimates of 82 economists surveyed by Bloomberg ranged from 792,000 to 986,000. The February pace was the slowest in four months.
Permits filed for future projects increased 7.7% to a 1.02 million pace in February, the most since October and reflecting a surge in applications for apartment-building construction. One-family, home-building permits dropped for a third straight month to the lowest level in a year. The median forecast in the Bloomberg survey called for a 960,000 rate.
Work on single-family houses rose 0.3% to a 583,000 rate in February from 581,000 the prior month. Construction of multifamily projects such as condominiums and apartment buildings decreased 1.2% to an annual rate of 324,000.
Two of four regions showed increases in groundbreaking last month, led by the Midwest and South.
February ended with its coldest final week since 2003, according to Berwyn, Pa.-based weather data provider Planaytics Inc. The second week of the month was the snowiest such period since 2007.