When it comes to housing starts, the 12-month rolling total is typically seen as a more statistically accurate representation of housing data because monthly statistics have a tendency to be extremely volatile. However, that doesn’t mean numbers on a month-by-month basis should be completely ignored.
Despite strong growth in the 12-month rolling total for housing starts, the month of March saw housing starts fall at a faster rate than expected and permits for future home construction hit a one-year low, Reuters reports. A cooling housing market would be in line with a sharp slowdown in economic growth in the first quarter.
Decreasing 8.8 percent, groundbreaking is now at a seasonally adjusted annual pace of 1.09 million units, which marks the lowest level since October. This drop in groundbreaking suggests a moderation in housing market activity and adds to the long list of other data, like business spending, trade, and retail sales, which seems to point to weak economic growth in the first quarter.
After growing at a rate of 1.4 percent in the fourth quarter of 2015, first-quarter GDP growth estimates are as low as a 0.2 percent annualized rate.
March also saw single-family housing projects fall 9.2 percent to a 764,000-unit pace, which is the lowest since October 2015. However, this pace is still a 14.2 percent increase of March 2015’s pace and the month-to-month drop comes after February saw its highest level of single-family starts since 2007 (exemplifying why month-by-month looks at the housing market can sometimes prove to be all bark and no bite).
The multifamily sector also saw some regression in March, dropping to a 325,000-unit pace, a decrease of 7.9 percent. Starts for buildings with five or more units also fell to their lowest level in a year.