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03-19-20 | Economic News

Housing Starts Slip but Are Still Strong

February's Data Lifted by Unseasonably Mild Weather

Although housing starts fell 1.5% in February, a major revision to January's numbers gave the month nearly 100,000 units more starts than what was expected.

In the most recent reporting period, overall housing starts lost 1.5% but single-family starts rose 6.7%, beginning the year at a pace well ahead of the prior year by 20.6%. This can be accredited to single-family homes having been significantly underbuilt throughout most of the country over the past decade, resulting in record low inventories and sustained price increases ahead of wage growth and inflation.

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"There is little doubt builders will scale back starts somewhat as layoffs mount in coming weeks but the industry is not likely to pull back as much as it has in prior recessions because activity has been so low for so long in an absolute sense," stated the release from the Wells Fargo Economics Group.
Multifamily starts in the U.S. fell 14.9% in February.

The increase in single-family starts was led by a 18.5% spike in the South. That gain followed an 11.7% drop the prior month. In fact, single-family starts in the South the past three months accounted for 55% of single-family starts nationwide. The strength in the region is most obvious in Texas, Florida, Georgia, the Carolinas and eastern Tennessee. Single-family starts gained 4.9% in the Midwest and 3.0% in the Northeast but tumbled 13.8% in the West.

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