In a less than encouraging sign for construction equipment sales and building contractors, the latest housing report from the U.S. Department of Commerce showed a sharp drop in new home starts.
The government reported that new home starts fell 10.8 percent in March from February, even after new home construction received a surprising bump up in the previous month.
Economists had expected the report to show an annual construction rate of 540,000 new units, but the report predicted an annual rate of just 510,000 units. The annual rate was 48 percent lower than the previous year and the second-lowest level on record.
Analysts pointed out that the drop was due to volatility in the multi-family housing sector, which declined 29 percent to an annual rate of 152,000.
The government said privately-owned housing completions in March were at a seasonally adjusted annual rate of 824,000, 3.5 percent above the revised February estimate of 796,000.
However, that rate is 30.9 percent below the March 2008 rate of 1,192,000, the government reported.