US home construction rose moderately in March as builders resumed work at the end of a frigid winter.
Applications for building permits slid however, clouding the outlook for future construction.
Builders started work on 946,000 homes at a seasonally adjusted annual rate in March, up 2.8 per cent from 920,000 in February, the Commerce Department said on Wednesday.
Construction of single-family homes rose 6 per cent, more than offsetting a 3.1 per cent drop in the construction of apartments, condominiums and town houses.
As the weather moderated, construction rose 30.7 per cent in the Northeast and jumped 65.5 per cent in the Midwest. But it fell 9.1 per cent in the South and 4.5 per cent in the West.
Applications for permits, a gauge of future activity, fell 2.4 per cent to a seasonally adjusted annual rate of 990,000.
“The outcome is less dynamic than anticipated,” Annalisa Piazza, an economist at Newedge Strategy, said in a research report.
Economists had expected housing starts to hit 970,000 last month. Piazza noted that housing construction in March was 5.9 per cent less than a year earlier.
“It echoes several of the other reports we’ve seen of late which do show a spring snap back, but one not nearly as strong as once hoped,” said Dan Greenhaus, chief strategist at BTIG.
Many analysts have been expecting an improving economy to lift the housing market, which has been recovering the past two years.
But housing has struggled to maintain momentum, with rising prices and higher mortgage rates having deterred some home buyers.
Builders also complain of a shortage of workers and lots to build on.