BEAT: Housing Starts Rise To 917,000
Economists polled by Bloomberg were looking for housing starts to rise 2.8 percent MoM, to an annual rate of 915,000.
Building permits were up 4.6 percent MoM, to an annual rate of 946,000. This beat expectations of a 2.3 percent MoM to an annual rate of 925,000.
Housing starts for January were revised up to reflect a 7.3 percent decline to an annual rate of 910,000, from the initial reading of an 8.5 percent decline to 890,000. Meanwhile, building permits were downwardly revised to show a 0.6 percent decline to 904,000, from a 1.8 percent rise to 925,000.
Remember, homebuilders downsized during the crisis, and it will take time for projects to pick up again.
Yesterday we got homebuilder sentiment, considered a leading indicator for housing starts. That declined to 44 in March.
The U.S. already has extremely tight housing supply. And economists have in large part raised their home price forecasts because of a decline in housing inventory.
Paul Diggle at Capital Economics has said that if capacity constraints among mortgage lenders eased up it could help the housing recovery. The recovery in employment in the real estate credit sector hasn't kept pace with the increase in mortgage applications.