The number of new housing starts in the USA fell by 11.4 percent in March, to an annual rate of 1.32 million new homes. Price increases and high interest rates are dampening the construction boom.
The decline was unexpectedly deep, especially when it comes to single-family homes. Analysts had expected an annual rate for new housing starts in the USA of 1.42 million.
The number of building permits increased slightly, but for single-family homes, the number of building permits fell to the lowest level in four months.
At the same time, a new index from the central bank's regional office in Philadelphia – called the Philly-index – shows that orders are plummeting at the highest rate since the pandemic in the industry-heavy region.
This could be a signal of a deep downturn in the economy during the second half of the year and can be interpreted as a reaction to the Trump administration's tariff shock.
The Philly-index – which measures the activity level in the manufacturing industry – falls to minus 26.4 in April, which can be compared to plus 12.5 in March and an average forecast among analysts of plus 2.2.
This is the lowest level for the Philly-index since the turbulent days following the collapse of the regional major bank Silicon Valley Bank in 2023.
