Construction exploded last month, with housing starts surging 39 percent year-over-year, the Commerce Department reported this week. However, against the coronavirus pandemic, whether builders can continue making progress on projects remains uncertain.
The Breakdown
Housing Starts: 1.6 million (-1.5% month-over-month, +39.2% year-over-year)
Multifamily Starts: 508,000
Single-Family Starts: 1.07 million
Building Permits: 1.46 million (-5.5% month-over-month, +13.8% year-over-year)
Multifamily Permits: 415,000
Single-Family Permits: 1.01 million
Completions: 1.32 million (-0.2% month-over-month, -1.2% year-over-year)
Multifamily Completions: 280,000
Single-Family Completions: 1.03 million
What the Industry’s Saying
“Housing starts saw another strong month in February—another data point displaying the strength of the housing market before the impacts from the coronavirus…Single-family permits, which are typically an indicator of near-term starts activity, remained strong as well…Due to the slowdown in economic growth and the volatility in markets from the coronavirus, mortgage rates will remain lower for longer, which will help homebuyers in the longer run. However, we may start to see these home-building trends take a turn for the worse, depending on the industry’s ability to continue day-to-day operations during these difficult times.” – Joel Kan, Associate Vice President of Economic and Industry Forecasting, Mortgage Bankers Association
“Housing starts in February showed continued positive developments for the housing sector. The dire inventory shortage will ease as total starts top 1.5 million and the single-family starts reaching above a million for the third consecutive month. However—a big however—is that the data reflects February before the stock market turmoil and before the massive economic quarantine arising from the spread of the coronavirus. Very hard to predict what will happen in the upcoming months. Buyer traffic will no doubt slow. Should the extent of quarantine be short, then expect a robust rebound in the economy as well as homebuyer demand. If the economic shutdown lasts for more than six months, then homebuilders will need to cut back on production.” – Lawrence Yun, Chief Economist, National Association of REALTORS®
