New residential construction in the U.S. showed a sharp pullback in the month of February, according to a report released by the Commerce Department on Friday.
The report said housing starts plunged by 7.0 percent to an annual rate of 1.236 million in February after jumping by 10.1 percent to a revised 1.329 million in January.
Economists had expected housing starts to drop by 2.7 percent to a rate of 1.290 million from the 1.326 million originally reported for the previous month.
The sharp pullback in housing starts was primarily due to a steep drop in multi-family starts, which plummeted by 26.1 percent to a rate of 334,000 in February after soaring by 25.6 percent to a rate of 452,000 in January.
On the other hand, the report said single-family starts climbed by 2.9 percent to a rate of 902,000 in February after jumping by 3.5 percent to a rate of 877,000 in January.
The Commerce Department also said building permits tumbled by 5.7 percent to a rate of 1.298 million in February after surging up by 5.9 percent to a revised 1.377 million in January.
Building permits, an indicator of future housing demand, had been expected to slump by 5.4 percent to a rate of 1.32 million from the 1.396 million originally reported for the previous month.
Multi-family permits plunged by 14.8 percent to a rate of 426,000, while single-family permits edged down by 0.6 percent to a rate of 872,000.
Compared to the same month a year ago, housing starts in February were down by 4.0 percent, but building permits were up by 6.5 percent.
On Thursday, the National Association of Home Builders released a separate report showing a modest decrease in homebuilder confidence in March.
The NAHB/Wells Fargo Housing Market Index edged down to 70 in March from a revised 71 in February. Economists had expected the index to dip to 71 from the 72 originally reported for the previous month.