WASHINGTON – Construction of new homes fell in March by the largest amount in five months, with weakness in all regions of the country except the Northeast.
Home construction dropped 8.8 per cent to a seasonally adjusted annual rate of 1.09 million units, the Commerce Department reported Tuesday. It was the third decline in the past four months and left construction at its slowest point since October.
Applications for permits to build new homes, a good indicator of future activity, dropped 7.7 per cent in March to an annual rate of 1.09 million units.
Construction activity has been volatile this year, dropping in January and March but posting a 6.9 per cent rise in February. Housing construction has been helping fuel the overall economy, and economists expect the sector to rebound in the coming months.
Construction of single-family homes declined 9.2 per cent in March to a seasonally adjusted 764,000. Apartment construction was down 7.9 per cent to a rate of 325,000 units.
The overall drop of 8.8 per cent was the biggest one-month decline since a fall of 11.3 per cent in October.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday was unchanged at a reading of 58 in April, reflecting an overall optimistic outlook for new homes as the industry heads into the all-important spring sales season.
By region of the country, construction jumped 61.3 per cent in the Northeast in March, following a big drop in February. Sales were down in all other areas, led by a 25.4 per cent fall in the Midwest, a 15.7 per cent drop in the West and an 8.4 per cent decline in the South.