January due to harsh winter weather, particularly in the South and Northeast regions. These regions saw even larger increases.
However, building permits, an indicator of future construction, dipped slightly from the prior month.
What’s the bottom line? Overall, while February’s housing starts improved to a seasonally adjusted annual rate of 1.5 million, they remain below the average household formations of 1.8 million per year seen over the past five years. This gap highlights a significant mismatch between demand and supply, which should also help sustain home values moving forward.
