Nationwide housing starts turned upward for the first time in eight months this February, posting a 22.2 percent gain that was due primarily to a big bump on the often-volatile multi-family side, according to numbers released from the U.S. Commerce Department.
“While welcome news, this gain only reflects a modest rebound from January, which was the worst month in history for new-home production,” says National Association of Home Builders (NAHB) Chief Economist David Crowe. “The majority of the gain was due to characteristic volatility on the multi-family side, while single-family housing starts were up just over one percent for the month.”
“Builders did pull a larger volume of single-family permits in February, suggesting a glimmer of hope for the prime home buying season, which is near at hand,” says NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “That said, we realize there’s a need to be extremely cautious in terms of new building activity going forward, because there’s still quite a lot of inventory out there that needs to be absorbed as foreclosures continue to flood the market in many areas.”
Total U.S. housing starts rose 22.2 percent to a seasonally adjusted annual rate of 583,000 units in February. This gain reflected an 82.3 percent surge to a 226,000-unit pace on the multifamily side and a 1.1 percent gain to a 357,000-unit pace on the single-family side.
Regionally, the only area of the country to post a lower rate of total housing starts for February was the West, with a 24.6 percent decline. The Northeast posted the largest gain, of 88.6 percent, reflecting a rebound from a nearly equal decline in the previous month. Meanwhile, the Midwest posted a 58.5 percent gain following a deep plunge in January, and the South posted a 30.2 percent gain. January-February averages were well below the monthly averages for the final quarter of 2008 in all regions of the country.
Building permits, which can be an indicator of future building activity, rose 3 percent overall to a seasonally adjusted annual rate of 547,000 units in February. This reflected an 11 percent gain in single-family permits to 373,000 units and a 10.8 percent decline in multi-family permits to 174,000 units.
By region, building permits recorded a 27.6 percent gain in the Northeast, no change in the Midwest, a nearly 6 percent improvement in the South and a 13.6 percent decline in the West in February.
The National Association of Home Builders is a Washington, D.C.-based trade association representing more than 200,000 members involved in home building, remodeling, multi-family construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction.