-Dan Greenhaus, chief strategist at BTIG
US housing starts plummeted in February by the most in four years as extreme weather forced American construction companies to cut down on the number of building sites. Groundbreaking tumbled 17% to a seasonally adjusted annual rate of 897,000 units, recording the lowest level since January 2014, according to the Commerce Department. However, January's starts were revised upwards to a 1.08 million unit pace, compared with the previously estimated 1.07 million units. February plunge was likely to be temporary as permits for future construction rose 3% in the reported month to a 1.09 million annualized pace, the fastest pace since October, following a 1.06 million rate a month earlier. A surge in building permits was driven by applications for multifamily units, suggesting single-family construction, which accounts for the major part of the housing market, will continue to struggle going forward. Starts of single-family properties plummeted 14.9% to a 593,000 rate in February. Meanwhile, construction of multifamily projects including condominiums and apartment buildings plunged 20.8% to an annual rate of 304,000.
While increasing employment and low borrowing costs have helped the industry gain steam, sales remain limited by insufficient supply of cheaper homes and weak wage growth.
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