Housing Starts plummeted 11.4% in March, marking their steepest drop in a year as builders remain hesitant to begin new projects. Single-family home construction fell even more dramatically, down 14.2% from February.
Meanwhile, Building Permits increased 1.6%, slightly beating expectations, though many may not materialize due to higher building costs from tariffs.
What’s the bottom line?
March’s Housing Starts fell to a seasonally adjusted annual rate of just 1.32 million, significantly below the 1.8 million average annual household formations seen over the past five years. While home completions are running higher at1.55 million annually, this still falls well short of household demand. This supply-demand imbalance should continue to support home values moving forward.