U.S. Housing Starts and Permits (March 2024)

Housing starts and permits decline in March

• Housing starts fell 14.7% month-on-month (m/m) in March to 1.32 million (annualized) units, coming in well below the consensus forecast of 1.49 million. Revisions to the two prior months added roughly 29k units to the previous reported tallies.
• Declines were recorded in both the single-family and the multi-family segments, with the former falling 12.4% m/m (or 145k units) and the later falling 21.7% m/m (or 83k units). Single-family starts pared back the gain of the previous month, while multi-family starts fell to the lowest level since April 2020.
• Residential permits also fell by more than expected in March – declining 4.3% m/m to 1.46 million annualized units. Single-family permits fell 5.7% m/m, marking the first decline in fifteen months, while multi-family permits fell 1.2% m/m.
• Among the four Census regions, declines were seen in the Northeast (-36.0% m/m), the Midwest (-23.0% m/m), and the South (-17.8% m/m), while gains were recorded in the West (+7.1% m/m).

Key Implications

• Homebuilding activity moderated in March as weakness in the multi-family segment persisted and the single-family segment gave back most of its considerable gain from the prior month. For the first quarter, single-family starts increased by 6%, while multi-family starts fell sharply by 58%. Both segments continue to recalibrate, with single-family starts responding to the lack of existing inventory in the market while the multi-family segment pulls back amid a healthy supply pipeline.
• Homebuilders are also contending with the shifting interest rate outlook, as higher rates weigh on demand and push up capital costs. The National Association of Home Builders sentiment index for April was flat relative to March, with current activity expanding modestly but expectations for future sales moderating.  

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