March housing starts were down 22.3 percent from the month before, which is the largest drop since 1984, according to Zillow. This pullback comes as no surprise, but March did bring one glimmer of hope. Even during a global pandemic and sky high unemployment, housing starts were still up 1.4 percent from the same time last year, a testament to the strength of the home building industry before the coronavirus. But Zillow warns builders to prepare themselves for what comes next: April’s figures will likely be much worse.
The first read on home construction activity since the U.S. coronavirus outbreak began in earnest represents a disappointing reversal from prior months, which is not unexpected. But even so, the data itself is a bit surprising. Despite the big monthly drops, the year-over-year increases point to just how far the construction market had come in the year leading up to the outbreak of the crisis — and could signal an even larger drop to come in April. Builder confidence was soaring in the months leading up to the crisis, and the market looked poised for a banner year in 2020.