Housing Market Shows Signs of Recovery
Housing starts slipped in February, but according to the Commerce Department, permits for future construction rose to their highest level since October 2008. Housing starts were down 1.1 percent to a seasonally adjusted annual rate of 698,000 units. New building permits surged 5.1 percent to a 717,000-unit pace.
Residential construction was up 34.7 percent in February compared to last year, but an oversupply of unsold homes continues to depress prices in the housing market and discourage builders. Housing starts last month were pulled down by a 9.9 percent drop in the construction of single-family homes, which account for a large portion of the market.
Still, residential construction is expected to add to economic growth this year for the first time since 2005. Groundbreaking for multi-family housing projects soared 21.1 percent last month, benefiting from rising demand for rental apartments as falling prices discouraged some from owning a home.
Builder sentiment held a near five-year high in March, a survey showed on Monday, and home builders were optimistic about sales over the next six months.
Permits to build single-family homes jumped 4.9 percent to a 472,000-unit rate, the highest since April 2010, while permits for multi-family homes rose 5.6 percent to a 245,000-unit pace.
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