U.S. builders broke ground on fewer homes in March, but the pace of construction so far this year remains stronger than in 2016.
As The Associated Press reports, the Commerce Department says housing starts fell 6.8% last month to a seasonally adjusted annual rate of 1.22 million. The setback came after strong gains in a warmer-than-usual February. Groundbreakings on new homes are still 8.1% higher through the first three months of this year compared with 2016.
More Americans are seeking homes as job security has improved with low unemployment. But even with a wave of construction, a dwindling supply of new and existing homes across much of the country has threatened to become a major drag on the housing market.
Jennifer Lee, a senior economist at BMO Capital Markets, suggests that the March decline was likely temporary.
“Is it the start of a trend? Likely not, given the strong demand for housing and the low levels of inventory to choose from,” Lee says.
Despite a winter storm last month, housing starts increased in the Northeast largely because of apartment construction. The pace of groundbreakings tumbled in the Midwest, South and West.
The March decline was likely due in part to an unseasonably temperate January and February, which allowed builders to begin construction earlier.
