Housing Starts: Sharp Declines Nationwide

Bottom Line: Normally a 20+% decline in housing starts would be alarming, but March housing starts were within the bounds of expectations. Shutdowns for the novel coronavirus allowed construction in many cases through March, but builders were less willing to start new jobs. While the Northeast was hit somewhat harder in March, declines in housing starts were nationwide. Even places like the South, where shutdowns didn't start until April in many cases, saw a sharp drop in housing starts. Overall. while construction continues in many parts of the country, there is clearly a reluctance to start new homes given a dearth of buyer traffic and continued uncertainty around the path of the virus. Housing Starts FELL by 22.3% in March to 1216k, compared with market expectations for a decline to 1300k. Meanwhile, the prior month was revised modestly lower from 1,599k to 1,564k. Housing starts are now 1.4% ABOVE their year-ago level. However, they are still a sharp 46.5% BELOW their January 2006 peak. Single-Family Housing Starts FELL by 17.5% to 856k. Single-family housing starts are 2.8% ABOVE their year-ago level but still 53.0% BELOW their January 2006 peak. Multifamily Housing Starts FELL by 31.7% to 360k. Multifamily starts are now 1.6% BELOW their year-ago level.