Housing Starts Rebound in February

Housing starts rebounded strongly in February, the Census Bureau reported Tuesday.

Starts increased 11.2% in February, compared to an 11.5% decline in January.

First American Deputy Chief Economist Odeta Kushi called the increase a surprise to the upside. “Recall that the January decline was a function of several factors: a colder than usual January, mortgage rates crossing the 7% threshold in January, and ongoing builder pessimism reflecting lingering supply-side and affordability headwinds,” she said.

(Illustration courtesy of U.S. Census Bureau)

“The smoothed single-family permits and starts data shows a modest positive trend, but there are headwinds that could hinder any positive momentum,” Kushi added. “While builders have benefitted from a chronic housing shortage made worse by the ‘sellers’ strike’ fueled by higher mortgage rates, competition from existing-home inventory has picked up, especially in key builder markets like Florida and Texas.”

The Census Bureau reported single-family housing completions were at a rate of 1,066,000 in February, 7.1% above January’s revised figure.

Census also reported that building permits for units in buildings with five units or more were at a rate of 404,000 in February, while unit starts in buildings with five units or more was 370,000. February’s completion rate for units in buildings with five units or more was 512,000.