Apartments drive increase in housing starts

In a surprise to many analysts, U.S. housing starts rose 22.2 percent to a seasonally adjusted annual rate of 583,000 units in February, although most of the gain was attributable to a sharp rise in construction of new apartments.

Tuesday's report by the U.S. Census Bureau and the Department of Housing and Urban Development showed an 82.3 percent month-to-month increase in multifamily starts, to 226,000 a year, while single-family starts were up a more modest 1.1 percent, to an annual rate of 357,000 a year.

While "welcome news," the gain reflects only "a modest rebound from January," the "worst month in history for new-home production," said National Association of Home Builders (NAHB) Chief Economist David Crowe in a statement.

The number of building permits issued for single-family homes jumped 11 percent from January to February, to an annual rate of 373,000, "suggesting a glimmer of hope for the prime home-buying season," said NAHB Chairman Joe Robson, who is a Tulsa, Okla., homebuilder.

Looking back a year, housing starts were down 47.3 percent and building permits were off 44.2 percent.

Regionally, month-over-month starts increased an estimated 88.6 percent in the Northeast and 58.5 percent in the Midwest. Starts rose 30.2 percent in the South, but fell 24.6 percent in the West.

Permit issuance rose 27.6 percent in the Northeast and 5.9 percent in the South, fell 13.6 percent in the West, and was unchanged in the Midwest from January 2009 to February 2009.

***

What's your opinion? Leave your comments below or send a letter to the editor.

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.