ICS Magazine

Housing Starts Fell Sharply in February

March 18, 2003
WASHINGTON (Reuters) - Groundbreaking on new U.S. homes slowed sharply in February, as harsh winter weather unexpectedly pushed housing starts to their lowest level since April 2002, the government said on Tuesday.

The Commerce Department said starts tumbled 11 percent -- the largest drop since January 1994 -- to a seasonally adjusted 1.622 million unit annual rate.

While Wall Street analysts had anticipated a slowing in starts from the rapid pace of recent months, the drop was larger than they had expected. Economists polled by Reuters had forecast starts to fall to a 1.723 million unit annual rate, and permits to dip to a 1.730 million annual clip.

But in a sign the drop was largely related to severe winter weather in the month, permits for home building rose slightly and the number of homes under construction showed only a small decline. Permits gained 0.4 percent to a 1.786 million annual rate, while houses under construction at the end of the month fell 0.3 percent to a 1.052 million yearly pace.

Financial markets showed little initial reaction to the report, focusing instead on a possible war with Iraq and the Federal Reserve's policy setting meeting that began on schedule on Tuesday, despite a partial closure of the building during a police standoff with a farmer in downtown Washington.