Housing starts rebounded with a surprisingly strong 9% jump in February after a big slump in the prior month, the Commerce Department reported March 20. The report showed housing starts at an annualized pace of 1.525 million, well ahead of Wall Street forecasts of 1.445 million and defying expectations of a further slide in the troubled real estate market.
Even with the rebound in February, housing starts are down 28.5% from a year earlier.
New home construction fell steadily last year as the market was buffeted by rising interest rates and slowing demand following years of spectacular growth which unleashed a speculative frenzy in some cities.
Despite the increase in new starts, building permits continued to fall in February, signaling future weakness.
Housing permits, which provide an indication of future housing starts, fell 2.5% to a seasonally adjusted annual rate of 1.532 million units in February. That was the 12th drop in 13 months and the lowest level since November of last year. In the past year, permits have dropped 28.6%.
Copyright Agence France-Presse, 2007