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Washington, D.C. — The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential construction statistics for February 2018.

Building Permits — Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,298,000. This is 5.7 percent (±0.7 percent) below the revised January rate of 1,377,000, but is 6.5 percent (±2.4 percent) above the February 2017 rate of 1,219,000. Single-family authorizations in February were at a rate of 872,000; this is 0.6 percent (±0.9 percent) below the revised January figure of 877,000. Authorizations of units in buildings with five units or more were at a rate of 385,000 in February.

Housing Starts — Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,236,000. This is 7.0 percent (±16.7 percent) below the revised January estimate of 1,329,000 and is 4.0 percent (±12.2 percent) below the February 2017 rate of 1,288,000. Single-family housing starts in February were at a rate of 902,000; this is 2.9 percent (±10.8 percent) above the revised January figure of 877,000. The February rate for units in buildings with five units or more was 317,000.

Housing Completions — Privately-owned housing completions in February were at a seasonally adjusted annual rate of 1,319,000. This is 7.8 percent (±14.8 percent) above the revised January estimate of 1,224,000 and is 13.6 percent (±16.0 percent) above the February 2017 rate of 1,161,000. Single-family housing completions in February were at a rate of 895,000; this is 3.0 percent (±10.6 percent) above the revised January rate of 869,000. The February rate for units in buildings with five units or more was 418,000.

“After a hot start to the year with January housing starts and permits blowing away expectations, both numbers for February came in below expectations,” said Scott Volling, principal with PwC. “Permits were 1,298,000, slightly below the consensus of 1,322,000 but still a relatively strong number and 6.5 percent higher than last year. However, February starts disappointed at 1,236,000, 3.8 percent below the consensus of 1,285,000 and 4 percent below last year’s number of 1,288,000.

“While we weren’t expecting the same sizzling results as January, expectations were high as February is historically a strong month for starts,” Volling said. “While some of the drop in starts can be attributed to weather in the northeast, the biggest drop occurred in the West, which is a bit surprising. Interestingly, one of the numbers that stands out for February is the rate of completions, coming in at a 10-year high of 1,319,000, which also follows a strong January as well. The historically high rate of completions may be an indication that builders are prioritizing in-flight completion velocity over new starts while they make longer-term adjustments around production flow and product mix to weight more heavily the first-time buyer and entry-level demographics. If so, and with five straight months of strong permit results, the dip in starts this month should be temporary.”

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