WASHINGTON, April 18 U.S. homebuilding fell in March as the construction of single-family homes in the Midwest recorded its biggest decline in three years, likely reflecting bad weather.
Housing starts declined 6.8 percent to a seasonally adjusted annual rate of 1.22 million units, the Commerce Department said on Tuesday. February's starts were revised up to a 1.30 million-unit pace from the previously reported 1.29 million-rate.
Economists polled by Reuters had forecast groundbreaking activity falling to a 1.25 million-unit pace last month. Homebuilding was up 9.2 percent compared to March 2016.
Construction in February was boosted by unseasonably warm temperatures. But temperatures dropped in March and a storm lashed the Northeast and Midwest regions, which could have accounted for the drop last month in homebuilding.
Single-family homebuilding, which accounts for the largest share of the residential housing market, fell 6.2 percent to a 821,000 unit-pace last month. Single-family starts in the Midwest declined 35 percent, the largest drop since January 2014, to their lowest level since August 2015.
Single-family starts in the Northeast were unchanged. They rose 3.2 percent in the South, but fell 5.5 percent in the West.
Last month, starts for the volatile multi-family housing segment dropped 7.9 percent to a 394,000 unit-pace.
Pointing to underlying strength in the housing market, building permits increased 3.6 percent, driven by a 13.8 percent surge in the multi-family segment.
While single-family permits fell 1.1 percent, they were not too far from the more than nine-year high reached in February.
A tightening labor market, which is generating steady wage growth is underpinning the housing market. The sector, however, remains constrained by a dearth of properties available for sale.
Builders have, however, failed to bridge the gap, citing a range of problems including shortages of labor and land as well as rising material prices. A survey on Monday showed homebuilders confidence slipped in April from a near 12-year high in March. Still, measures of current sales and sales expectations remained at lofty levels. (Reporting By Lucia Mutikani)
China's top banking regulator tells banks to push forward with reform
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