After a strong 2015, the pace of US homebuilding dropped 8.8% in March, falling to its lowest level since October, the Commerce Department said yesterday.
In what could signal a broader trend, the dip erases February’s gains, leaving the overall trend for Q1 largely flat compared to last year’s pace, the Wall Street Journal reports.
And while starts are down at large, most of the slowdown was concentrated in the Midwest. Northeastern housing starts actually picked up.
Economists are divided as to whether this drop is simply part of a broader Q1 slowdown—which in recent years is typically followed by a Q2 rebound—or whether March’s drop is a sign the housing market is beginning to stagnate.
“That is somewhat more worrisome as the permit demand has lagged starts for the last two months,” Joel Naroff of Naroff Economic Advisors tells the Wall Street Journal. It “could signal continued softness in the market.”
