Housing starts increased 3.1% in February compared with January and, counter to the recent trend, starts of single-family homes, not multifamily units, drove the increase.
What’s more, estimates of permit signings released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development show that single-family starts will likely increase again in March, as multifamily production slows.
Housing starts were at a seasonally adjusted annual rate of 1.288 million in February – an increase of 3.0% compared with 1.251 million in January and an increase of 6.2% compared with 1.213 million in February 2016, according to the estimates.
Starts of single-family homes were at a rate of about 872,000, an increase of 6.5% compared with about 819,000 in January.
Starts of multifamily units were at about 396,000, a decrease of 7.7% compared with 429,000 in January.
Regionally, starts increased 35.7% in the West. In fact, the West was entirely responsible for February’s increase, as starts fell by 3.8% in the South, 4.6% in the Midwest and 9.8% in the Northeast.
Building permits in February were at an annual rate of about 1.213 million, a decrease of 6.2% compared with about 1.293 million in January but an increase of 4.4% compared with about 1.162 million in February 2016.
Permits for single-family homes were at a rate of 832,000, an increase of 3.1% compared with in 807,000 January. Permits for multifamily units were at a rate of 334,000 a decrease of 26.9% compared with 457,000 in January.
Regionally, permits increased 25.4% in the Midwest but fell 10% in the West, 10.4% in the South and 22.3% in the Northeast.
“This month’s gain in single-family starts is consistent with rising builder confidence in the housing market,” says Granger MacDonald, chairman of the National Association of Home Builders (NAHB), in a statement. “We should see single-family production continue to grow throughout the year, tempered somewhat by supply-side constraints such as access to lots and labor.”
“The growth in the single-family arena is very encouraging, but may be partly attributable to unusually warm weather conditions throughout most of the country,” adds Robert Dietz, chief economist for NAHB. “The modest drop in multifamily starts is in line with our forecast, which calls for this sector to continue to stabilize in 2017.”