According to the latest data from the Department of Commerce, housing starts ran at a 1.14 million seasonally adjusted annual rate in March, down 0.3 percent in February.
The slowest since May 2017, starts missed MarketWatch's forecast of a 1.225 million seasonally adjusted annual rate. Annually, starts dropped 9.7 percent, and the construction pace fell 14.2 percent. Housing permits issued dropped 1.7 percent to a rate of 1.27 million, short of economists' prediction of a 1.3 million rate. Government data on new-home construction is typically revised downward after its release.
New construction has been anything but a shot in the arm for a supply-starved housing market. Home builders are wary of overbuilding, like in the last cycle, and also constrained by more difficult conditions. Labor is hard to find, and policies, like trade war tariffs, are making materials more costly. It’s always been more challenging to build homes for the lower end of the market, and even more so now.