Construction of new homes tumbled in February as the economy continues to feel the effects from the long and harsh winter.
The latest report from the Commerce Department shows housing starts fell 17% to a seasonally adjusted average of 897,000 units. It’s the lowest level since January of 2004, and a drop of 3.3% year over year.
Single-family homes, which make up two-thirds of the market, dropped 14.9%. But in areas of the northeast hit hardest by cold and snow, housing starts dropped a record 56.5%.
Building permits did go up by 3%, to 1,092,000, but most were for multi-family housing, while permits for single-family homes fell 6.6%. Applications for permits have exceeded a 1 million-unit pace every month since July, 2014.
The slow market could have an impact on whether the Fed decides to raise interest rates. A two-day policy meeting begins Tuesday, but the slow housing starts and the recent cut in GDP growth estimates by economists could keep things in a holding pattern for now.
Follow this link to see the complete housing start report from the Commerce Department.