Construction Decline Likely A Temporary Setback

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New estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development show privately owned housing starts – which measure the number of new homes that began construction during the month – fell in February. The 17 percent plunge brought construction levels to their lowest point in a year. But, despite the decline, many real estate analysts say the drop is only a temporary setback, mostly due to the harsh winter weather that battered much of the country during the month. In fact, regional data shows that new residential construction dropped 56.5 percent in the Northeast and 37 percent in the Midwest, both areas where bitterly cold conditions lingered for much of February. On the other hand, the number of permits authorized to build new homes rose 3 percent from the month before. Permits are generally a good indicator of future new home construction and last month’s increase may be evidence that construction activity will rebound from February’s slowdown in the months ahead. More here.

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