- Housing starts rose to 193k annualized units in March after slowing to 166k in February
- The rebound was in line with market expectations and supports our view that February’s decline was due to wintry weather
- Starts for the quarter came in at their slowest pace since 2015, though that speaks more to the strength of homebuilding in recent years than it does weakness to start 2019
- In a separate report, building permit issuance slowed in February but remained robust at a 229k annualized pace, suggesting starts could return to above the 200k mark in the near-term
Homebuilding activity held up well last year in the face of a slower resale market. That doesn’t appear to have changed early this year, despite starts clocking in at a four-year low in the first quarter. Wintry weather weighed on activity in February, and the pace of permit issuance suggests starts will pick up in the second quarter. We doubt last year’s 213k pace will be repeated in 2019, but demand for new homes, particularly in the multi-unit segment remains strong. The Bank of Canada’s shift to the sidelines—we think they’re done raising interest rates for a while—should assist that trend.
