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US Housing Starts Fall, Building Permits Surge

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US Housing Starts Fall, Building Permits Surge

US housing starts slipped further in February, while building permits rebounded sharply, offering hope the US housing market is gradually recovering from a slowdown that was accentuated by severe weather.

Groundbreaking in February slipped 0.2 percent to a seasonally adjusted annual rate of 907,000, the Commerce Department reported today. That follows a revised drop of 11.2 percent the previous month. The advance estimate for January reported a drop of 16 percent. Meanwhile, building permits rose 7.7 percent in February to a seasonally adjusted annual pace of 1.01 million.

Groundbreaking for privately-owned, single family houses increased 0.3 percent to a seasonally adjusted pace of 583,000. The rate for buildings with five or more units was 312,000.

Housing completions in February increased 4.4 percent to a seasonally adjusted annual rate of 886,000.

Authorizations to build single-family homes declined 1.8 percent to a seasonally adjusted rate of 588,000. Permits for projects with five or more units surged 24.3 percent to 407,000, official data showed.

Severe weather at the beginning of the year accentuated existing weakness in the housing sector. February marked the third consecutive month groundbreaking declined, as cold weather continued to hamper construction projects. Housing starts plunged 37.5 percent in the Northeast, a region that was hit particularly hard by cold temperatures. Groundbreaking in the Northeast last month fell to the lowest level since November 2012.

The housing market has been under pressure since last summer, after rising mortgage rates kept potential buyers out of the market. The unexpected surge in permits offers hope the housing sector could regain momentum as early as the spring.

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