February home starts decline, but economists focus on upbeat signs
Economists brushed off a decline in new residential construction starts last month and instead looked at an increase in permits issued for houses and apartment buildings as a positive indicator that the real estate market is on the mend.
Housing starts fell 1.1% from January to a seasonally adjusted annual rate of 698,000, the Commerce Department reported. That was a 34.7% surge from February 2011.
Starts were down 5.9% from January in the West and 12.3% in the Northeast. They were up 1.5% in the South and 3.0% in the Midwest.
Building permits told a different story, up 5.1% above the revised January rate and 34.3% above February 2011. Economists looked at the increase in permits as a sign that the economy was improving.
Economist Patrick Newport of IHS Global Insight said in a note to clients: “This report is one of the more encouraging new construction reports we have seen in the last four years.”
He said apartment construction is picking up across the U.S., and that home-building was on the rise in the South, which accounts for about half of single-family home construction. Even while starts were down last month, they were at their third-highest level since October 2008, he said.
