Reflecting the impact of severe snowstorms in several regions across the country, new residential construction showed a notable decrease in the month of February, according to a report released by the Commerce Department on Tuesday.
The report showed that housing starts fell 5.9 percent to an annual rate of 575,000 in February from the revised January estimate of 611,000. Economists had expected housing starts to fall to 570,000 from the 591,000 originally reported for the previous month.
Notable drops in new residential construction in the Northeast and the South contributed to the decrease, with housing starts in the regions falling by 9.6 percent and 15.5 percent, respectively.
New construction of multi-family homes also showed a substantial decrease, with the rate for structures with five units or more falling by 43.1 percent to 58,000 in February from 102,000 in January. Single-family housing starts showed a much more modest 0.6 percent decrease.
Additionally, the Commerce Department said that building permits, an indicator of future housing demand, fell by 1.6 percent to annual rate of 612,000 in February from the January rate of 622,000. Building permits had been expected to fall to 601,000.
Peter Boockvar, equity strategist for Miller Tabak, said, "Weather notwithstanding, builders have been getting ready for the spring selling season and the last hope, for now, for people to take advantage of the upcoming expiration of the home buying tax credit while mortgage rates remain historically low."
"From an inventory perspective on one hand we want lower starts but on the other, builders have boosted GDP in the hopes that the buyers come out for new homes rather than existing ones," he added.
Boockvar continued, "The housing stimulus party is about to end so we'll see what gets squeezed in while it still lasts and what kind of hangover we see after."
While housing starts and building permits were both down on a monthly basis, however, it is worth noting that housing starts were up 0.2 percent compared to the same month a year ago and building permits were up 11.3 percent year-over-year.
Monday afternoon, the National Association of Home Builders released a report showing an unexpected deterioration in homebuilder confidence in the month of March. The decrease reflected the challenges posed by poor weather conditions and distressed property sales.
The reported showed that the NAHB /Wells Fargo Housing Market Index fell to a reading of 15 in March from a reading of 17 in February. The decrease came as a surprise to economists, who had expected the index to come in unchanged from the previous month.
Housing data is likely to remain in focus next week, with reports on existing home sales and new home sales due to be released on Tuesday and Wednesday, respectively.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.