Housing Starts Rose in February

WASHINGTON — American builders started more houses and apartments in February than a month earlier, the Commerce Department reported on Tuesday, pointing to a housing recovery that was gaining strength.

The government said builders broke ground on homes at a seasonally adjusted annual rate of 917,000, an increase from 910,000 starts in January. February’s performance was the second-fastest pace since June 2008, behind December’s pace of 982,000.

Single-family home construction increased to an annual rate of 618,000, the strongest level in four and a half years. Apartment construction also ticked up, to 285,000.

The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent, to 946,000, last month. That was also the most since June 2008, just a few months into the Great Recession.

The American housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.

Still, the supply of available homes for sale remains low. That has helped push up home prices, which rose nearly 10 percent in January compared with the period a year earlier, according to CoreLogic. The price gain was the biggest increase in nearly seven years.

The number of previously occupied homes for sale has fallen to its lowest level in 13 years. And the pace of foreclosures, while still rising in some states, has slowed sharply on a national basis. That means fewer low-priced foreclosed homes are being dumped on the market.

Those trends, and the likelihood of further price gains, have led builders to step up construction. Last year, builders broke ground on the most homes in four years.

Homebuilders have become much more confident in the last year. But in March, a measure of homebuilder confidence fell for the second consecutive month over concerns that demand for new homes was exceeding supplies of land, building materials and workers. In the short term, that could slow sales.

But the survey noted that the outlook for sales over the next six months rose to its highest level in more than six years.

Though new homes represent only a fraction of the housing market, they have an outsize effect on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the homebuilders.

Article source: http://www.nytimes.com/2013/03/20/business/economy/housing-starts-rose-in-february.html?partner=rss&emc=rss