WASHINGTON–U.S. homebuilding declined more than had been expected during February, primarily due to a downturn in the construction of multi-family housing units that offset a second straight monthly increase in single-family projects.
According to the Commerce Department, housing starts declined 7.0% to a seasonally adjusted annual rate of 1.236 million units. Data for January was revised up slightly to show groundbreaking increasing to a 1.329 million-unit pace instead of the previously reported 1.326 million units, the Commerce Department reported.
Although mortgage rates declined by a few basis points in the most recent data, overall rates have been rising, which has also helped to tamp down home sales at the same time inventory has been limited.
Single-family homebuilding, which accounts for the largest share of the housing market, increased 2.95% to a rate of 902,000 units in February. Single-family home construction rose in the Northeast, South and West, but declined in the Midwest, the Commerce Department said.
Starts for the multi-family housing segment were down 26.1% to a rate of 334,000 units in February, the lowest level since September 2017. Permits for the construction of multi-family homes dropped 14.8% to a 426,000 unit-pace, according to the Commerce Department.