A report released by the Commerce Department on Friday unexpectedly showed a modest decrease in new residential construction in the U.S. in the month of March.
The Commerce Department said housing starts dipped by 0.3 percent to an annual rate of 1.139 million in March from the revised February estimate of 1.142 million.
The drop came as a surprise to economists, who had expected housing starts to surge up by 5.9 percent to a rate of 1.230 million from the 1.162 million originally reported for the previous month.
Single-family housing starts fell by 0.4 percent to a rate of 785,000, while multi-family starts were unchanged at a rate of 354,000.
The report said building permits also tumbled by 1.7 percent to an annual rate of 1.269 million in March from the revised February rate of 1.291 million.
Building permits, an indicator of future housing demand, had been expected to rise by 0.3 percent to a rate of 1.300 million from the 1.296 million originally reported for the previous month.
While single-family building permits slumped by 1.1 percent to a rate of 808,000, multi-family permits plunged by 2.7 percent to a rate of 461,000.
Compared to the same month a year ago, housing starts were down by 14.2 percent and building permits were down by 7.8 percent.
On Tuesday, the National Association of Home Builders released a separate report showing a modest improvement in U.S. homebuilder confidence in the month of April.
The report said the NAHB/Wells Fargo Housing Market Index inched up to 63 in April after holding at 62 in March, with the uptick matching expectations.
“Builders report solid demand for new single-family homes but they are also grappling with affordability concerns stemming from a chronic shortage of construction workers and buildable lots,” said NAHB Chairman Greg Ugalde.
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