US new-home construction unexpectedly fell in March, decelerating to the slowest pace since May 2017 and suggesting builders remain wary even as lower mortgage rates and steady wage gains offer support to consumers.
Residential starts fell 0.3 percent to a 1.139 million annualised rate after a downwardly revised 1.142 million pace in the prior month, according to government figures released. Permits, a proxy for future construction, slumped 1.7 percent to a 1.27 million rate.
The drop signals developers continue to struggle to build affordable properties amid rising labor and materials costs. Still, there have been signs of stabilisation in real estate, with mortgage rates down from last year and the Federal Reserve signaling that it’s likely to keep borrowing costs on hold this year.