Groundbreaking to build homes rose in February and new
permits for construction climbed to the highest level since 2008, a sign the
nation's housing market recovery is gathering steam.
The Commerce Department said on Tuesday that starts at
building sites for homes rose 0.8 percent last month to a 917,000-unit annual
rate. That was in line with analysts' expectations of a 915,000-unit rate.
Starts for single-family units, which comprised about two
thirds of the total, edged up 0.5 percent to their highest level since June
2008.
Permits for future home construction rose to a 946,000-unit
rate, also the quickest since June 2008.
The housing market has regained some footing after a historic
collapse that helped push the economy into a deep recession.
Home building added to national economic growth last year
for the first time since 2005 and Tuesday's data reinforces the view that it
will provide stronger support this year. That could help counter the drag
expected from tighter fiscal policy as Washington works to shrink the federal
budget deficit.
"Home building continues to recover and add to the
recovery," said Gus Faucher, an economist at PNC Financial Services in
Pittsburgh. "The rise in permits suggest we will have a solid
spring."
The housing data was just the latest to suggest the economy
has built a fair bit of momentum in the first quarter. Nevertheless, the
Federal Reserve at a meeting on Tuesday and Wednesday is expected to push
forward with plans to buy $85 billion in bonds per month until its sees a
substantial improvement in the labor market outlook.
Data for U.S. housing starts can be volatile and is
sometimes subject to large revisions. The government revised upward its estimate
for January housing starts to a 910,000-unit rate.
The housing market remains a shadow of its former self, with
starts at less than half of their pre-recession peak and near levels seen in
the early 1990s.
The recovery also has been bumpy. In March, homebuilder
sentiment slipped to the lowest level in five months as supply chain concerns
and rising costs dented enthusiasm, according to data released on Monday.
Stock index futures were little changed following the data
amid caution ahead of a crucial vote in Cyprus that could lead the country into
default. Investors are waiting to see if the nation's troubles would have a
wider impact in the euro zone.