With mortgage applications at multiyear lows and hitting a two-decade low in late February, it looks like both construction companies and investors are shifting away from single-family housing and towards multifamily housing construction, according to data from the U.S. Census.
Permits jumped 24.3% for multifamily units while single-family permits dropped 1.8% in both February and January.
Overall permits jumped 7.7% to a 1.018 million unit pace after decreasing 4.6% in January.
Housing starts came in much as expected, below expectations and down from January. Overall starts nudged down 0.2% to a 907,000 annual rate from an upwardly revised 909,000 rate for January, which followed a downwardly revised December number of 1.024 million.
Analysts projected 910,000 units for February. January and December previously were 880,000 and 1.048 million, respectively.
Single-family starts rose 0.3% after a 13.2% plunge in January. Multifamily starts dipped 1.2% in February after a 7.6% decline the month before.
Housing starts in January were hit by extreme cold as starts plunged 16.0% to a 880,000 annual unit rate. Starts of single-family homes fell 15.9% to 573,000 with condos similarly in line, down 16.3% to 307,000.
Starts in the South, which is by far the largest region for this report, fell 12.5% with the West, the second largest region, showing a 17.4% decline, despite the weather in January in these regions not being severe as it was in the northeast.
Permits, which are less affected by weather, showed a smaller decline and probably more closely reflect the underlying trend for the new home market.
Permits fell 5.4% to a 937,000 unit rate with single-family homes showing relative strength, down only 1.3%. Regionally, the South showed a 3.4% gain while the West showed a big decline, down 26.0%.