Home Completions Soar 10.8%

The number of housing units on which construction was completed in February jumped 10.8% above January’s weather-beaten level, hitting the highest mark in more than seven years, the Commerce Department said Thursday.

Meanwhile, the Labor Department said the number of new claims for jobless benefits last week remained below 320,000 for the eighth straight week, the longest stretch in nearly a decade and the latest sign the vibrant economy is fueling a tight labor market.

First-time applications for unemployment insurance inched up by 1,000 last week to a seasonally adjusted 314,000, the department said.

Total homes completed rose to a seasonally adjusted annual rate of 1.505 million in February, up from 1.358 million during the first month of the year. That’s the highest level since January 1990, when housing completions reached an annual rate of 1.508 million, a Commerce Department spokeswoman said.

Builders put the finishing touches on 9.3% more multifamily homes in February than a month earlier, while completions of single-family homes jumped 17.5%.

In January, housing completions fell 8.5%, according to revised figures. Previously, the Commerce Department said housing starts dropped 9.9% in January to a 1.324-million rate as harsh weather kept builders away from construction sites. Housing completions aren’t considered a forward-looking gauge of housing activity because they lag starts of new construction by about six months.

Over the last year, real estate markets have been helped by high levels of consumer confidence, low unemployment and gains in the stock market. In months ahead, though, higher borrowing costs could put a damper on home construction.

The jobless claims report Thursday was good news for the work force, but fed anxieties on Wall Street that the Federal Reserve will raise interest rates again to cool the economy and keep inflation from overheating. Higher interest rates curb corporate profits and investor earnings.

Despite the small advance, the report marked the longest stretch of weekly claims under 320,000 since 1988-89, toward the peak of the last business cycle and just before the 1990-91 recession.

The four-week average of new weekly jobless claims inched up by 500 to 312,500 last week, but remained below 320,000 for the seventh straight week, also the longest stretch since 1989.

Many analysts prefer to track the less-volatile four-week average because it smooths out the spikes in the weekly reports.