US homebuilding dropped to a six-month low in February as severe cold gripped many parts of the country, in a temporary setback for a housing market that remains supported by extremely lean inventories amid strong demand for larger homes.
“We can read nothing into the underlying strength of the economy from these weather-distorted reports,“ said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. “March data are likely to show strong bounce backs in consumer spending, industrial production and construction activity.”
Mortgage rates have jumped in tandem with Treasury yields, which have spiked as investors anticipate that stronger growth will generate significant inflation. Growth is being driven by massive fiscal stimulus, including President Joe Biden's US$1.9 trillion rescue package, which was enacted last week.
A survey on Tuesday showed confidence among single-family homebuilders dipped in March, despite strong buyer traffic, amid worries over rising material costs and delivery times, especially for softwood lumber.
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