Building Less: Housing Starts Decline In February

By John S. McClenahen Weather across the U.S. may have been warmer in February than in January, but the rate of housing starts cooled. Privately owned housing starts were at a seasonally adjusted annual rate of 1.855 million last month, 4% below the revised January figure of 1.932 million, the U.S. Commerce Department and the U.S. Department of Housing and Urban Development jointly reported on March 16. Economists generally expected a start rate of 1.93 million in February. Starts for single-family housing in February were at a rate of 1.489 million, 4.1% below their January rate; starts for multi-unit buildings were at an annual rate of 336,000, 4% below their January rate. Building permits for privately owned housing units, an indicator of future activity, also declined in February, down 1.5% to an annual rate of 1.903 million. However, UBS Investment Research, New York, found two "encouraging" notes in the data. "First, building permits were above starts; that can be a signal that starts will rebound in subsequent months. Second, housing starts are still running ahead of our forecast that starts would average just 1.75 million in [the first quarter of 2004]."

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