WASHINGTON (3/18/15)--Housing starts plummeted by 17% in February largely thanks to the winter storms that beat up massive swaths of the country during the month (Economy.com March 17).
Single-family and multifamily housing starts both receded significantly, according to Census Bureau numbers, with single-family starts falling by 14.9% and multifamily starts plunging by 21.6%.
Annually, overall starts dropped 3.3% to 897,000 in February.
Completions also suffered a setback, dropping by 13.8% for the month and 1.8% on an annual basis. Single-family completions have fallen 3.6% annually, while multifamily completions dropped 1.7%.
"The housing market continues to be led by multifamily rentals, with single-family demand lagging far behind," said Andres Carbacho-Burgos, Moody's analyst (Economy.com). "Purchase mortgage origination volume has been flat for the past three years, while the (Mortgage Bankers Association) purchase application index is still on a slight downward trend from 2013."
On a positive note, housing permits improved in February with a 3% uptick, potentially signaling a warmer streak of home construction in the coming months.
Though, multifamily units led the gains, posting a 19.9% increase for the month, while single-family structures dropped by 6.2%.
Annually, permits climbed 7.7% in February.
"The increase in housing permits this month is an encouraging sign even though it is led by multifamily rather than single-family construction," Carbacho-Burgos said. "The new normal in the housing market will lead to increased construction activity even with a reduced role for the single-family market."