The economic expansion of the United States saw a glum outlook as one of its key drivers, real estate sector, recorded a drop in March more than what was forecasted.
As reported by Reuters, housing starts fell 8.8 percent last month to 1.09 million units, below the 1.17 million units that economists expected, data from the Commerce Department showed. This is the lowest level of housing starts since October and it indicates a cooling down of the real estate market although this is 14.2 percent higher than the figures in March 2015.
According to the data, single-family housing starts fell 9.2 percent to 764,000 units in March just after it reached its all-time high the previous month. Meanwhile, multi-family housing starts decreased by 7.9 percent to 325,000 units. In addition, building permits last month fell 7.7 percent to 1.09 million units from February's 1.18 million units.
HousingWire said that these new figures further reflects that volatility of the housing starts. In fact, comments from analysts range to both positive and negative ends, from "impressive" to "disappointing."
"Today's housing starts data is further proof of the volatile nature of these reports. While an 8% drop sounds like a major hit to the housing market, it's important to focus on the overall upward trend of growth showing opportunities for a strong housing market remain in place," said Quicken Loans Vice President Bill Banfield, per HousingWire.
Looking at the total of new housing starts in the past 12 months, Trulia Chief Economist Ralph McLaughlin said that it "grew impressively, and the April 2015 - March 2016 period represents the best 12-month span for starts since August 2007," the publication added.
On the contrary, Brent Nyitray, director of Capital Markets, iServe Residential Lending, said that these new housing starts figures are "highly disappointing."
HousingWire quoted Nyitray saying, "It is astounding that we have such a deficit of housing in this country, and are building 25% fewer homes than we did before the bubble, Housing (or lack thereof) has been the reason why this recovery has been so weak."