US housing starts dropped in March for a second consecutive month, while the consensus was looking for a slight increase. On a monthly basis, housing starts dropped by 5.8% M/M to a total level of 654 000, the lowest level since October last year while the consensus was looking for a pick-up to 705 000. The details show that weakness was based in multi-family starts (-16.9% M/M), while singlefamily starts dropped only marginally (-0.2% M/M).
Building permits, on the contrary, rose for a third consecutive month in March. Permits increased by 4.5% M/M to 747 000, the highest level since September 2008, while a slight decline was expected. Strength in housing permits was based in multi-family ones (20.8% M/M), while single family permits fell by 3.5% M/M. Housing under construction rose marginally and housing completed rose by 4.2% M/M.
The housing data were mixed but we continue to see early signs of a recovery, which is probably partly due to the warm weather and because builders are shifting from single family homes to apartments.
Nevertheless the climate remains challenging as the market faces intense competition from foreclosed homes and credit conditions remain tight.