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February building permits jump to highest level in 3 1/2 years

 

From Market Watch

March 20, 2012

 

U.S. builders started construction on new homes in February at a slightly slower pace, but the biggest increase in permits in 3 1/2 years indicates work will pick up in coming months.


Housing starts fell 1.1% to an annual rate of 698,000 last month, compared with an upwardly revised 706,000 in January, the Commerce Department said.  Economists had expected housing starts to rise to 706,000 from an original reading of 699,000 in January.

Single-family home permits increased 4.9% in February to an annual rate of 472,000. Permits for condominiums and apartments rose a smaller 3.3% to a rate of 219,000.

The housing industry is trying to recover from its worst slump since the government began record-keeping in the early 1960s and mounting evidence suggests a thaw is underway. Sales of new and existing homes and the issuance of new building permits have been on the rise since last fall.

Higher demand for new homes is being fueled by ultra-low interest rates, improved economic growth and faster job creation.

Most economists expect the housing market to continue to rebound in 2012 and contribute to U.S. growth for the first time since 2007, but they say it could take several years to fully recover. In a healthy economy, housing starts should average at least 1.5 million each year, they estimate.

 

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