Key points:

• Housing starts and building permits plunge, beating growth expectations
• Single-family housing starts and permits fall significantly
• Market sentiment may turn cautious amid continued instability in the housing market

U.S. Real Estate Market March Trends

The US real estate sector experienced a significant decline in March, with both housing starts and building permits falling more than expected. This decline occurred after the previous growth, indicating that the real estate market has entered a period of volatility, which may have an impact on the overall economy and financial markets.

Housing starts drop sharply

In March, there was a significant decrease of 14.7% in housing construction, dropping to 13.2 million units. This sharp decline reversed the 12.7% growth in February, indicating that the momentum of housing construction may be unstable. It is worth noting that the construction of single household residential properties in key market segments also decreased by 12.4% to 1.022 million units.

Building permits also fell

The building permit is an indicator of future construction activities, which decreased by 4.3% in March to 1.458 million. Prior to this, there was a slight increase in January, reflecting a decrease in building intentions, especially in single household residential areas where permits decreased by 5.7% to 973000.

Comparison with expected and historical data

Both housing construction and construction permits were lower than market expectations, with a significantly lower number of construction projects than the expected 1.48 million units. The construction permit also decreased from the expected 1.51 million, highlighting a slowdown in future construction plans.

In addition, the number of completed private residences decreased by 13.5% from February, a decrease of 3.9% compared to the same period last year, and the number of completed single household residences decreased by 10.5%.

Reactions of the economy and the dollar index

Despite disappointing real estate data, the US dollar index remains strong, maintaining above 106. This indicates that although the real estate sector has shown signs of weakness, it has not yet had a profound impact on the broader financial market.

Market forecast

The dual decline in housing starts and building permits indicates a pessimistic outlook for the US real estate market in the short term. The continuous decline in various sub sectors indicates that builders may be cautious due to economic uncertainty or market saturation. Investors and market observers should be prepared to anticipate a further slowdown in housing activity, which may suppress economic growth prospects and have a negative impact on market sentiment.