U.S. Housing Starts Slumped in March by the Most Since 1984

(Bloomberg) -- New U.S. home construction declined in March from the previous month by the most since 1984 as the pandemic started to take a bigger toll on the housing market and broader economy.

Residential starts tumbled 22.3% to a 1.22 million annualized rate, an eight-month low, according to a government report released Thursday. The median forecast in a Bloomberg survey called for a 1.3 million pace. Applications to build, a proxy for future construction, fell 6.8% to a 1.35 million rate.

The slowdown marks a dramatic reversal for the housing industry, which had been firing on all cylinders before stay-at-home orders imposed to arrest the coronavirus sent unemployment skyrocketing and much of the economy into deep freeze.

“April will likely be a lot worse -- it took until mid-March or even later for many states to tighten restrictions, and there’s a real possibility that many builders fast-tracked what they could in those early weeks before bowing to reality,” Matthew Speakman, economist at Zillow Group Inc., said in a statement. “With so much uncertainty across the economy, and the outlook not yet getting any clearer, it’s unlikely that builder activity will revert to anything close to ‘normal’ levels any time soon.”

Single-family starts fell to an annualized pace of 856,000, the slowest since May. Multifamily starts, a category that tends to be volatile and includes apartment buildings and condominiums, slowed sharply to a 360,000 rate, the weakest since July.

Sentiment among builders plunged the most in 30 years of record-keeping, according to a Wednesday report on the monthly National Association of Home Builders/Wells Fargo Housing Market Index. The S&P’s index of homebuilder stocks has lost more than 33% this year.

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