Housing Starts Dive 11.2% in March

Housing construction, dampened by an upswing in mortgage rates, took its biggest dive in six years last month--down 11.2% from February. Builders began work on new homes at a seasonally adjusted annual rate of 1.60 million in March, the Commerce Department said. It marked the sharpest one-month drop since January 1994, when housing starts fell by 17%. The weakness, which followed a 3.6% rise in February, came from a steep decline in condominiums, apartments and other multifamily housing. Analysts were surprised by the magnitude of March’s decline, which pulled down the level of overall housing starts to its lowest point since June. But they cautioned that although construction activity, an engine of the booming economy, is expected to slow in coming months, it will remain at healthy levels. This, analysts said, will help keep the Federal Reserve on its steady-as-she-goes approach to raising interest rates. Starts of condos, apartments and other multifamily housing dropped 41% after a 30.5% rise in February. Starts of single-family homes rose 0.2% after a drop of about 4% in February.