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Economy in Brief

U.S. Housing Starts & Building Permits Collapse in March
by Tom Moeller  April 16, 2020

• The housing sector is hard hit by the spread of the coronavirus.

• Falling permits suggest more weakness to come.

New residential home building weakened dramatically last month and likely will fall further. Housing starts declined 22.3% (+1.4% y/y) during March to 1.216 million units (SAAR). They fell 3.4% in February to 1.564 million, revised from 1.599 million. Total starts are 24.9% below their January peak. The latest level was the lowest level of starts since July of last year. The Action Economics Forecast Survey expected 1.320 million starts for March.

Starts of single-family starts declined 17.5% (+2.8% y/y) to 856,000 last month following a 4.5% February increase. It was the lowest level of single-family starts since May of last year. Multi-family starts fell 31.7% (-1.6% y/y) to 360,000 after declining 15.9% in February. It was the lowest level since February 2019.

A 6.8% decline (+5.0% y/y) in building permits to 1.353 million units followed a 6.3% February drop, suggesting continued weakness in new home building. Permits to build single-family homes fell 12.0% (+8.7% y/y) to 884,000, a six-month low. Permits to build multi-family dwellings rose 4.9% (-1.3% y/y).

By region, last month's weakness in starts was led by a 42.5% decline (-16.9% y/y) in the Northeast to 69,000. It followed a similar decline during February. Starts in the West weakened 18.2% (-8.5% y/y) to 301,000 and added to February's 15.6% decline. In the Midwest, housing starts fell 21.5% (+15.9% y/y) to 153,000 and more-than-reversed the increase during the prior month. In the South, starts decreased 21.3% (+5.8% y/y) to 693,000, the lowest level since October.

The housing starts and permits figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.

The Fed's latest Beige Book covering regional economic conditions can be found here.

Housing Starts (000s, SAAR) Mar Feb Jan Mar Y/Y % 2019 2018 2017
Total 1,216 1,564 1,619 1.4 1,298 1,250 1,209
  Single-Family 856 1,037 992 2.8 894 873 852
  Multi-Family 360 527 627 -1.6 404 377 357
Starts By Region
  Northeast 69 120 217 -16.9 116 111 111
  Midwest 153 195 173 15.9 170 171 181
  South 693 881 793 5.8 689 631 603
  West 301 368 436 -8.5 323 337 314
Building Permits 1,353 1,452 1,550 5.0 1,350 1,330 1,286
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