New residential construction in the U.S. showed a substantial decrease in the month of February, according to a report released by the Commerce Department on Wednesday, with housing starts extending the sharp pullback seen in the previous month.
The report said housing starts plummeted by 10.3 percent to an annual rate of 1.421 million in February after slumping by 5.1 percent to a revised rate of 1.584 million in January.
Economists had expected housing starts to decrease by 0.9 percent to a rate of 1.565 million from the 1.580 million originally reported for the previous month.
With the steep drop, housing starts continued to give back ground after reaching a fourteen-year high of 1.670 million in December.
The report also showed a much bigger than expected decrease in building permits, which plummeted by 10.8 percent to an annual rate of 1.682 million in February after spiking by 10.7 percent to a revised rate of 1.886 million in January.
Building permits, an indicator of future housing demand, had been expected to tumble by 7 percent to a rate of 1.750 million from the 1.881 million originally reported for the previous month.