WASHINGTON (BLOOMBERG) - Beginning construction of US houses climbed to a four-month high in February, led by the strongest pace of single-family homebuilding in nearly a decade.
Residential starts advanced 3 per cent to a 1.29 million annualized rate, a Commerce Department report showed on Thursday (March 16). The median forecast of economists surveyed by Bloomberg was 1.26 million. Construction of one-family dwellings rose 6.5 per cent to an 872,000 pace, the fastest since October 2007.
Homebuilding, which may have benefited from warmer winter weather during the month, continues to pick up as a tight job market and healthier finances give potential buyers the wherewithal to make purchases. At the same time, higher mortgage costs, rising property values and a shortage of ready-to-build lots represent hurdles for the industry.
Applications to build one-family homes rose to an 832,000 annualized rate in February, the strongest since September 2007. Overall permits, a proxy for future construction, decreased 6.2 per cent to 1.21 million as applications for apartment building declined.
Estimates for housing starts ranged from 1.21 million to 1.4 million, according to the Bloomberg survey of economists. The previous month was revised from a 1.25 million pace.
Work on multifamily homes, such as townhouses and apartment buildings, fell 3.7 per cent to an annual rate of 416,000. Data on these projects, which have led housing starts in recent years, can be volatile.
Permits for multifamily structures plunged 21.6 per cent to a 381,000 annualized rate.
While three of four regions posted a decline in February starts, the decreases were hurt by slowdowns in multifamily home construction, the report showed. Homebuilding jumped 35.7 percent in the West. Starts of single-family dwellings increased in all regions but the South.
The National Association of Home Builders/Wells Fargo index of homebuilder sentiment jumped to 71 in March, the highest since June 2005, from 65 the prior month, according to data released Wednesday. Readings greater than 50 mean more respondents reported market conditions as good. The measures of prospective buyer traffic, current sales and the six-month outlook also showed gains.