U.S. housing starts rose just 2.0% in March to a 2-month high of 926,000 units annualized, or 2.5% below a year ago, well below the expected double-digit rebound.
At least there was some better news beneath the surface. All of the downward weight was in the more volatile multis component, which declined for the second month in a row to a 1½-year low.
Building permits, an indicator of future starts (need permission to break ground before breaking ground), fell a more-than-expected 5.7% in March, the first decline since October. The level of 1,039k is well above that of starts, which points to stronger activity in coming months.
"There would ideally be more momentum than what we're seeing but housing activity should continue to improve in the months ahead, given the higher level of permits, still-low inventory levels in the existing market, and higher homebuilder confidence." - said BMO Capital Markets in a report on Thursday
