New US Home Construction Falls to Lowest Level Since August

New home construction in the US slowed last month as a leveling off in interest rates has given way to a lull in housing demand and caution among builders.

Residential starts decreased 14.7% in March to a 1.32 million annualized rate, the lowest since August, government data showed Tuesday. The figure was weaker than all estimates in a Bloomberg survey of economists.

Building permits, which point to future construction, fell to a 1.46 million rate in March. Both starts and permits were revised higher in February.

Pace of new construction weakest since August and permits also slide

Single-family home construction dropped by the most in about three years, while the pace of multifamily starts sank to lowest since the onset of the pandemic. Permits for both also fell.

After ramping up construction in recent months, builders may be taking a breather. The inventory of new homes for sale is near the highest since 2008.