Homebuilding heats up

Homebuilders are betting that sales will accelerate in 2017.

Compared to the first two months of last year, housing starts have increased 7.2 percent. Permits to start construction have risen at an even higher pace of 7.5 percent, according to figures released last week by the Census Bureau. Both these figures suggest that builders anticipate a busy home-buying season this spring and summer.

Construction crews were building homes at an annual rate of 1.29 million in February. That is slightly below the pace in August 2007, shortly before the start of the Great Recession.

The current construction rate is far from the heights of the housing bubble when it topped 2 million, but the growth coming into 2017 has occurred during a period of more cautious lending.

Developers are optimistic. The National Association of Home Builders/Wells Fargo builder sentiment index surged to 71 this month, the highest reading since June 2005.