February housing starts sink 22.5%

Inexplicably, housing starts took a dive in February, according to data released Wednesday by the Department of Commerce.

Privately owned housing starts in February were at a seasonally adjusted annual rate of 479,000; that's 22.5% below the upwardly revised January estimate of 618,000. It's also 20.8% below the February 2010 rate of 605,000.

Even more disappointing from a home builder's standpoint, February's number was the second worst month on record. Only April 2009 generated a slower rate of home construction, at 477,000.

On a single-family basis, starts were at a pace of 375,000, the lowest since March 2009.

The National Association of Home Builders (NAHB) described the results as "disconcerting" in a release today. 

"The decline in new construction and permits in February is the culmination of a great deal of nervousness that both builders and consumers are feeling right now," said Bob Nielsen, chairman of the NAHB and a home builder from Reno, Nev. "In an already-fragile market where credit for building and buying homes remains extremely tight, additional concerns about energy costs, interest rates and other factors are contributing to an atmosphere in which many have adopted a very cautious stance."

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