11:24a.m. EDT March 19, 2013
Housing starts gained momentum in February, rising 0.8% from January to a seasonally-adjusted rate of 917,000, the Census Bureau said Tuesday.
The rate is 27.7% above February 2012. Single-family starts were running at a 618,000 annual rate, up 0.5% from January.
In addition, building permits for future construction were running at a seasonally adjusted annual rate of 946,000, up 4.6% from January and 33.8% above February 2012. Single-family permits were issued at a 600,000 annual rate, up 2.7% from January.
Housing starts have now exceeded an annual rate of 900,000 for three consecutive months. That hasn't happened since 2008, although starts remain well below peak annual rates in excess of 2 million before the housing bubble burst.
Starts should continue picking up gradually and improve more in the second half, propelled by strengthening demand and a better labor market, said TD Economics economist Thomas Feltmate. He forecasts housing starts will reach an annual rate of 1 million units by year's end.
The National Association of Home Builders reported Monday that confidence among U.S. homebuilders fell this month because of concerns that increased demand for new homes is exceeding supplies of ready-to-build land, building materials and workers.
Those constraints could slow sales in the short term. But builders' outlook for sales over the next six months is stronger than it's been in more than six years.
The NAHB/Wells Fargo builder sentiment index released Monday fell to 44 from 46 in February. It was the second decline since January, which was preceded by eight straight monthly gains. A measure of current sales conditions declined from February's reading.
Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006.
The National Association of Realtors will report Thursday on existing home sales for last month. Economists' consensus forecast is for an annual sales rate of 5 million compared with 4.92 million in January.