Construction of single-family houses fell 4.8 percent in March to a 619,000 rate after the prior month was revised up to an almost five-year high of 650,000. The February reading was previously estimated at 618,000
“Housing continues to be the bright spot,” said Michelle Girard, chief U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “There’s still a lot of room to go with new construction activity.”
A decline in building permits may signal last month’s surge will be difficult to repeat. Applications (NHSPATOT) fell 3.9 percent in March to a 902,000 annualized rate, reversing the prior month’s gain. They were projected to rise to 942,000, within a range of 905,000 to 990,000.
Three of four U.S. regions showed a gain in starts last month, led by a 10.9 percent increase in the South.
Builders began work on 780,000 homes in 2012, a 28 percent gain from the prior year and the third straight annual increase. Even with the improvements, starts are short of the 2.1 million in 2005 at the peak of the boom, which was a three-decade high.
“The momentum from the housing rebound during 2012 has remained strong in the early months of 2013,” John Stumpf, chief executive officer at Wells Fargo & Co. (WFC), said on an April 12 earnings call. San Francisco-based Wells Fargo funded one in four U.S. mortgages in 2012. “Our near-term outlook is for steady gains in home sales, building activity, and price appreciation. Housing affordability remains excellent.”
Data from the Labor Department indicated policy makers have little reason to be concerned about inflation. The consumer- price index dropped 0.2 percent in March after a 0.7 percent jump in February, the government also reported today. The core measure, which excludes volatile food and energy costs, rose 0.1 percent, less than forecast.
For the 12 months that ended in March, consumer prices increased 1.5 percent, the smallest gain since July, compared with a 2 percent year-over-year gain reported in February.