Nationwide housing starts dropped 17% to a seasonally adjusted annual rate of 897,000 units in February, according to newly released data from the U.S. Commerce Department.
The decline marked the first time since August the annual rate has fallen below 1,000,000 and is the largest drop since February 2011. Compared to February 2014, housing starts last month are down 3.3%.
January’s performance was revised slightly higher from what was first estimated to an annual rate of 1.08 million.
“February’s numbers indicate that wavering consumer confidence continues to impact the housing recovery,” said National Association of Home Builders Chief Economist David Crowe. “Buyers are waiting for a stronger, more reliable economy before making a home purchase, and builders are responding to their reluctance. Even with this month’s drop in production, we expect the housing market to move forward this year in step with an improving economy.”
Single-family home starts fell 14.9% in February while multifamily starts dropped 20.8%.
Overall, the number of permits issued, an indicator of future building activity, increased 3% in February to a rate of 1.092 million, the highest level since October and 7.7% higher than in February 2014. Single-family permits fell 6.2% to 620,000, the lowest level since May, while multifamily permits rose 18.3% to a rate of 472,000 units.
Regionally, the Midwest, South and West registered permit gains of 6.1%, 7.3% and 2.2%, respectively, while the Northeast posted a 17.4% loss.