Multifamily drop pushes total housing starts down 7%
WASHINGTON — A decline in multifamily starts pushed overall housing production down 7% in February to a seasonally adjusted annual rate of 1.24 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department.
Multifamily production fell 26.1% to a seasonally adjusted annual rate of 334,000 units after an exceptionally high January report. Meanwhile, single-family starts posted a 2.9% gain to 902,000 units.
“The uptick in single-family production is consistent with our builder confidence readings, which have been in the 70s for four consecutive months,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, builders must manage rising construction costs to keep home prices competitive.”
“Some multifamily pullback is expected after an unusually strong January reading. Multifamily starts should continue to level off throughout the year,” said NAHB Chief Economist Robert Dietz. “Meanwhile, the growth in single-family production is in line with our 2018 forecast for gradual, modest strengthening in this sector of the housing market.”
Regionally in February, combined single- and multifamily housing production increased 7.6% in the Midwest. Starts fell 3.5% in the Northeast, 7.3% in the South and 12.9% in the West.
Multifamily weakness pushed overall permit issuance down 5.7% in February to a seasonally adjusted annual rate of 1.3 million units. Multifamily permits fell 14.8% to 426,000 while single-family permits were essentially unchanged, edging down 0.6% to 872,000.
Permit issuance rose 12.7% in the Northeast and 3.4% in the Midwest. Permits declined 3.4% in the West and 12.4% in the South.