US housing starts drop in February, dragged lower by multi-family units

US housing starts fell by over twice as much as expected last month, dragged down by a sharp fall in those for multi-family units.

In annualised terms, in February starts shrank by 7.0% month-on-month to reach 1.236m, according to the Department of Commerce, leaving them 4.0% below their year earlier level.

Economists had forecast a reading of 1.286m.

However, last month's drop was entirely the result of a decline in the less-important series for multi-family homes, which declined by 28% to 317,000.

Starts for single family homes on the other hand rose by 2.9% month-on-month to 902,000.

Having said that, permits for new work, which are considered a leading indicator for activity in the sector, fell by 5.7% over the month to 1.298m, but remained 6.5% above the level they were at in the same month of one year ago.

January's reading for housing starts was marked up slightly from a preliminary reading of 1.326m to 1.329m.