US Housing Starts Fell In March, Slowest Pace Since May 2017 Despite Interest Rate Declines (5+ Unit Starts Decline 3.44%, 1 Unit Starts Decline 0.38%)

The hopium about interest rate declines didn’t pay off in March. Housing starts fell despite declining interest rates.

(Bloomberg) —  U.S. new-home construction unexpectedly fell in March, decelerating to the slowest pace since May 2017 and suggesting builders remain wary even as lower mortgage rates and steady wage gains offer support to consumers.

Residential starts fell 0.3 percent to a 1.139 million annualized rate after a downwardly revised 1.142 million pace in the prior month, according to government figures released Friday. Permits, a proxy for future construction, slumped 1.7 percent to a 1.27 million rate. Both figures missed estimates.

1-unit starts fell -0.38% in March while 5+ unit (apartment) starts fell -3.44%. The Midwest was the biggest loser at -17.61%. The biggest winner was … the West at 31.40%.

hsmarch19

The decline in 10 year Treasury rates (yellow line) provided a nice pop in 1-unit start in January, but nada in February and Match (white line). Apartment starts (blue line) have slowed.

startsrates

So pushing interest rates down has not paid off as hoped.

powellput

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.