-- US housing starts unexpectedly jumped in March amid strength in both single-unit and multi-family projects, while building permits fell sharply, government data showed Wednesday.
Starts surged nearly 11% sequentially to a seasonally adjusted annual rate of 1.5 million units last month, according to the Census Bureau and the Department of Housing and Urban Development. The consensus was for a 0.4% drop in a survey compiled by Bloomberg. Preliminary February housing starts stood at 1.36 million units, according to official data.
"Homebuilding activity ended the first quarter with notable strength, hitting a 15-month high in March," Andrew Foran, an economist at TD Economics, said in a note.
Starts on buildings with at least five units jumped 9.6% month on month to 446,000 units in March. The single-family component increased 9.7% to 1.03 million units. Consolidated housing starts increased in all regions, with the biggest gains of 25% and 12% seen in the Northeast and Midwest, respectively, according to government data.
Building permits -- which is a forward-looking indicator of homebuilding -- slumped 11% on a monthly basis to 1.37 million units last month, while Wall Street expected a smaller 0.3% drop. Single-family unit permits declined 3.8%, while authorizations of buildings with five or more units sank 24%.
Mortgage rates fell through the end of February, with the national average for the fixed 30-year rate reaching below 6% for the first time in almost four years, according to TD Economics.
"However, mortgage rates rose by roughly half a percentage-point in March, which was likely reflected in the sharp decline in residential permits during the month and points to softening momentum heading into April," Foran said.
Earlier this month, the National Association of Home Builders and Wells Fargo said US homebuilder confidence sank in April to the lowest since September amid economic uncertainty, as well as increasing building material costs and interest rates.
"Combined with the impact of revised primary metal tariff policies, higher mortgage rates, and elevated economic uncertainty, homebuilding activity is likely to remain constrained over the near term," Foran said Wednesday.