New homes activity picks up in U.S.

Housing starts in the United States jumped considerably in February over January due to better weather with significant gains in activity for single-family detached homes, two recent reports have found.

A brief from CIBC Economics noted that starts in the U.S. grew nearly 11 per cent month over month, exceeding analysts' expectations.

The nation saw increases in both single-family detached home and multi-family home starts, it added.

Yet single-family home activity was notably higher — with 117,000 starts — up nearly 12 per cent, while multi-family units grew about eight per cent with 30,000 starts, TD Economics stated in a different report.

For single-family homes, February's starts represented the most activity since April 2022. Multi-family was much less active, but the rise in February partially reversed a sizable decline in January, TD added.

Permits also increased two per cent month over month. Single-family permits rose one per cent while multi-family grew more than four per cent month over month.

The midwest saw the biggest increase in month-over-month activity, up nearly 51 per cent, followed by the south at nearly 16 per cent.

In contrast, activity declined in the northeast about 10 per cent, and in the west, about eight per cent.

Although starts for both housing types grew in February, they are on different trajectories on a year-to-date basis, the TD report pointed out.

Single-family home starts were up 35 per cent year to date, while multi-family starts were down 35 per cent compared with the same period last year.

TD further added that expected interest rate cuts coming later this year should lead to a rise in starts and permits in the U.S., which should be met by strong buyer demand given the short supply of homes nationwide.