By Sharon Nunn and David Harrison 
 

WASHINGTON--A gauge of U.S. home building and approvals for new projects declined in March, continuing a recent weak stretch for new housing construction.

So-called housing starts fell 0.3% in March from the prior month to a seasonally adjusted annual rate of 1.139 million, the Commerce Department said Friday. Residential building permits, which can signal how much construction is in the pipeline, dropped 1.7% from February to an annual pace of 1.269 million in March.

These declines were unexpected; economists surveyed by The Wall Street Journal had predicted a 4.1% increase for starts and a 0.3% gain for permits in March.

Housing-starts data are volatile from month to month and can be subject to large revisions. March's 0.3% drop for starts came with a margin of error of 14.6 percentage points. Still, home construction has been weak, more broadly. Starts were down 9.7% in the first three months of 2019 compared with the same period a year earlier. Permits were down 5.4% year-to-date.

Single-family home construction and permits for this property type fell in March. Apartment building and approvals for multi-family projects declined from February.

Single-family building has held near the highest levels since before the most recent recession, while multifamily construction eased because of a glut of apartment properties in certain metro areas.

Economic fundamentals are in place to support strong demand. Wages are growing at the fastest pace in years, while employers continue to churn out jobs.

Yet factors including rising input costs and lack of available land pushed up prices and put a damper on the housing market in 2018. Recent housing data suggest the existing-home sales market could be turning around as interest rates fall.

Write to Sharon Nunn at sharon.nunn@wsj.com and David Harrison at david.harrison@wsj.com.

(END) Dow Jones Newswires

April 19, 2019 08:45 ET (12:45 GMT)

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