Builders broke ground on fewer new homes last month as starts plunged 17% from January, the Commerce Department said Tuesday.
Amid of harsh winter weather, the seasonally adjusted annual rate of new home construction fell to 897,000 from 1.08 million the month before, the government said. February was the first month since August when home building fell below an annual rate of 1 million units or better.
January’s rate was revised to 1.08 million from the previously reported figure of 1.06 million, the government said Tuesday.
Economists had expected a small decline in starts for February to an annual rate of 1.045 million units, according to Action Economics’ survey.
Snowstorms in parts of the country were presumed to have slowed construction. Commerce reported starts in the Northeast fell 56.5% and they were down 37% in the Midwest. The South was down 2.5% while starts in the Midwest slumped 9%.
Tuesday’s report shows single-family homes were started at an annual rate of 593,000, down 14.9% from January.
Permits, a gauge of future building activity, rose 3% to a rate of 1.09 million.
Just over 1 million housing units were started last year, the most since the recession. The National Association of Home Builders predicts builders will begin slightly more units this year and that new home starts will pick up this year as the weather and the economy continue to improve.
Home builders’ optimism is flagging slightly as the peak spring home buying season is nearing. The National Association of Home Builders/Wells Fargo home builders index for March dropped two points to 53, the NAHB said Monday. It was the third straight monthly decline. The index is seasonally adjusted.