After surging 17% in February, housing starts slowed again in March, dropping 10.8% to a seasonally-adjusted annual rate of 510,000, according to data from the Commerce Department. The March dive in housing starts marks the second-lowest rate since the 1940s and sits 48.4% below the March 2008 rate of 988,000. In stark contrast, last month’s jump in housing starts marked the first increase in eight months and the largest percentage gain in a whopping 19 years. But economists at Wrightson ICAP, among others, warned they were “inclined to write it off as a weather-related fluke,” as they were hesitant to draw any conclusions that new construction had found a floor. But with single-family starts at a very low level over the past three months, Michelle Girard, an economist for RBS securities believes the residential real estate sector may be starting to stabilize. “Of course, a meaningful upturn in home building will not be seen until inventory levels have been significantly reduced,” she told Market Watch. The number of single-family housing starts in March — which excludes apartment buildings — remained unchanged from the rate of 358,000 recorded in February. The South lead the way in March with 191,000 new housing starts, while the Northeast only started construction on 47,000 single-family homes. Building permits, which are less volatile than construction starts, fell 9% to a seasonally adjusted annual rate of 513,000. Permits for single-family homes dropped as well, from 390,000 in February to 361,000 in March. The National Association of Homebuilders says new-home inventory in March shrank to 311,000 units, which they calculated is a 10.7-month supply at the current sales pace. In a statement the Association says, “builders are doing a great job of thinning the supply of unsold homes and positioning themselves for a slow but steady housing recovery.” Builder confidence in the market for newly built, single-family homes rose five points in April to its highest level since October 2008, according to the latest National Association of Home Builders sentiment index. Write to Kelly Curran at [email protected].

More: