US housing starts fall more than expected

US housing starts data were released on Tuesday by the Commerce Department for the month of February. The number report showed that the number of new residential buildings that began construction during the previous month dropped by the most since 2011. Bad weather was cited as a factor behind the low numbers.

Building starts came in at 897,000 houses at an annualized rate, down 17 percent from January and the fewest in a year. This number was lower than most forecasts. There were expectations for around 1.04 million starts after a previously reported January pace of 1.07 million.

While the reason behind the drop in housing starts was because of the bad weather, the level of home construction overall continues to be depressed. Home construction is lacking traction after contributing little to economic growth in 2014. At the same time, the data underscore a shift toward more demand for rental properties that make up a smaller part of the market.

The US dollar was impacted after the data and it fell against most of its major counterparts. The Federal Reserve policy announcement later on Wednesday will be important to watch.

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