Housing starts plunged 17.6 percent in March, marking their steepest drop in more than 14 years, as groundbreaking for both single-family and multi-family homes tumbled, a Commerce Department report showed on Tuesday.
March housing starts fell to a 1.837 million unit rate from an upwardly revised 2.229 million unit pace in February. The decline marked the largest monthly drop since January 1991, when starts also fell 17.6 percent.
Wall Street economists had expected housing starts to drop a far smaller 4.8 percent in March to a 2.09 million unit rate from the 2.195 million unit clip initially reported for February.
Single-family housing starts slid 14.4 percent to a 1.539 million unit pace, the largest drop since January 1991, when they fell 19.6 percent. Starts on structures with five or more units also tumbled, falling 31.6 percent and marking the biggest decline since a 38.3 percent drop in March 2000.
Permits for future groundbreaking, an indicator of builder confidence, fell more than expected as well, dropping 4.0 percent to a 2.023 million unit pace. Analysts had forecast permits to dip 0.3 percent to a 2.10 million unit pace from a revised 2.107 million unit rate the previous month.
Housing starts fell 29.3 percent in the U.S. Midwest, 18.0 percent in the South, 12.7 percent in the West and 3.6 percent in the Northeast, the Commerce Department said.
While low mortgage rates have supported the housing sector, industry analysts have expected housing starts and existing home sales to edge back from 2004’s record levels.