With surges in the sector of home construction in the US back in December 2019, the US housing markets have seen the highest activity in the sector during the last 13 years. However, the house construction started to dip in January 2020, continuing with downward trending even in February the same year. Is Coronavirus responsible for the dip, or the surge in December naturally conditioned the dip that followed?
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House Construction in the US 2020: February is Seeing Less Homes Being Built
In February 2020, construction workers started building 1.6 million units, which showed a decline of 1.5% when compared to 1.62 million units in January. The decline is too ow to be contributed to the Coronavirus outbreak that also reached the United States, so analysts and construction companies are contributing the most recent decline to the December surge. Moreover, analysts were expecting a more significant drop in February than the one shown in the latest numbers. Applications for building permits in February fell by 5.5%, ing to 1.46 million units. Still, building permits for single-family home constructions surged by 1.7%, which is a good sign for the construction business.
Single-family Home Construction on the Rise
Construction for single-family homes has been on the rise for 10 consecutive months, as an economist Neil Dutta claims. Dutta also added that the impact of the Coronavirus outbreak is yet not reflected in the numbers behind the home construction business, but that an obvious decline in building permits should be noted after March and the following months. In February, single-family house construction projects that were only starting, jumped by 6.7% to 1,072,000 units, from January numbers set at 1,005,000 units. Northeast US has seen the biggest decline, dropping by over 25%. With the decline of mortgage rates, construction companies gained more confidence, which is probably why declines are not deeper at this point.
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