US housing starts plummeted by 22.3% in March, the Commerce Department announced Thursday, as the coronavirus pandemic tore into nearly all facets of the nation's economy.
The decline is the metric's largest since 1984 and signals a rapid pivot from the housing market's strength. Homebuilders had been operating at decade highs as recently as January before the global health crisis forced business closures, outsized job loss, and likely recession.
New home construction slipped to a 1.22 million annualized rate, its lowest level in eight months. Economists surveyed by Bloomberg expected a 1.3 million rate.
Single-family starts plunged 17.5% to an annualized rate of 856,000, their slowest pace in 11 months.
Residential construction is poised for further losses before stabilizing later in the year, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said. The housing market should be more insulated from the pandemic than other sectors, he added, and deferred demand should bring buyers back as soon as the summer.
"The drop in starts doesn't capture the full hit from the virus lockdowns, which began in earnest mid-month," Shepherdson said. "We expect a bigger fall in April, which should be the floor if restrictions begin to ease in early May in some states and across the whole country by the end of the month."
The data follows a Wednesday survey from the National Association of Home Builders/Wells Fargo Housing Market Index further detailing the housing market chaos. Homebuilder sentiment fell in April to its lowest point in nearly eight years, tanking to 30 from 72 the month prior. The move marked the biggest monthly drop in the index's 30-year history.
