Housing Starts Jump 2.6% to Best Level in 10 Months

Housing construction, aided by a boom in the single-family market, rose 2.6% in February to the highest level in 10 months, the government reported Tuesday.

The Commerce Department said new homes and apartments were started at an annual rate of 1.85 million units last month, the highest level since last April.

Housing construction had edged down 0.5% in January following a giant 10.8% increase in December.

The strength last month came from a big jump in construction of single-family homes that offset weakness in apartment building.

Single-family construction totaled 1.32 million units at an annual rate in February, 5.6% ahead of the January pace and the highest level in two years.

Construction of multifamily dwellings fell 4.1% to an annual rate of 534,000 units.

Analysts credited the sharp rise in single-family activity to mortgage rates, which have fallen substantially in recent months and now stand at the lowest levels in almost nine years.

John Tuccillo, chief economist for the National Assn. of Realtors, predicted that housing starts would total 1.65 million units this year, down 8.6% from last year’s 1.81 million units, which had been the highest level since 1978.

The reason for the slight decline is a belief that while single-family construction will remain strong, multifamily building will weaken further because of high vacancy rates and the negative impact of the new tax law.

Housing construction jumped 8.1% in the West to an annual rate of 519,000 units, the fastest pace in this region since January, 1984.