U.S. hous­ing starts jumped in Fe­bru­ary

Austin American-Statesman - - BUSINESS -

U.S. builders broke ground on new homes at a faster pace in Fe­bru­ary, a sign that de­vel­op­ers ex­pect solid sales growth this year de­spite higher mort­gage rates.

Hous­ing starts rose 3 per­cent last month to a sea­son­ally ad­justed an­nual rate of 1.3 mil­lion, the Com­merce Depart­ment said Thurs­day.

Al­most all of those gains came from con­struc­tion of sin­gle-fam­ily houses, which rose 6.5 per­cent.

Con­struc­tion of apart­ment build­ings fell 7.7 per­cent in Fe­bru­ary.

More Amer­i­cans are look­ing to pur­chase homes as the job mar­ket has im­proved, but the sup­ply of prop­er­ties for sale has been rel­a­tively low even with ad­di­tional con­struc­tion.

The in­crease in con­struc­tion starts points to greater sales this year even though mort­gage rates have climbed up­ward from re­cent lows, mak­ing monthly hous­ing pay­ments higher and hurt­ing af­ford­abil­ity.

Hous­ing starts are run­ning 7.5 per­cent higher than they did dur­ing the first two months of 2016. Builders last year started the most new homes since 2007, the year the Great Re­ces­sion be­gan as the hous­ing mar­ket be­gan to teeter.

Con­struc­tion surged last month in the West, off­set­ting de­clines in the North­east, Mid­west and South that were largely caused by a de­cline in apart­ment build­ing starts.

Still, growth in home build­ing also ap­pears to be tem­pered. Build­ing per­mits — an in­di­ca­tor of fu­ture home con­struc­tion — slipped 6.2 per­cent in Fe­bru­ary to an an­nual rate of 1.2 mil­lion.

Builders have been adding sup­ply to the mar­ket, just not enough to ad­dress the tight in­ven­tory of ex­ist­ing homes that make up the bulk of the real es­tate mar­ket.

The Na­tional As­so­ci­a­tion of Real­tors has re­ported that the num­ber of ex­ist­ing homes on the mar­ket is near its low­est level since 1999, while the in­ven­tory of new homes on the mar­ket is near an eight-year high.

KEITH SRAKOCIC / AP

Hous­ing starts rose 3 per­cent last month to a sea­son­ally ad­justed an­nual rate of 1.3 mil­lion, the Com­merce Depart­ment said. Al­most all of those gains came from con­struc­tion of sin­gle-fam­ily houses.

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