Housing market picks up steam
WASHINGTON (AP) -- U.S. builders started more houses and apartments in February and received building permits for future construction at the fastest pace in 4.5 years. The increases point to a housing recovery that is gaining strength.
The Commerce Department said Tuesday that builders broke ground on homes last month at a seasonally adjusted annual rate of 917,000. That's up from 910,000 in January. And it's the second-fastest pace since June 2008, behind December's rate of 982,000.
Single-family home construction increased to an annual rate of 618,000, the most in 4 1 2 years. Apartment construction also ticked up, to 285,000.
The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent to 946,000. That was also the most since June 2008, just a few months into the Great Recession.
And the figures for January and December were also revised higher. Overall housing starts have risen 28 percent higher over the past 12 months.
Separately, a private report showed the number of Americans with equity in their homes increased last year. That suggests one of the biggest drags from the housing crisis is easing. It could also clear the way for more people to put homes on the market.
"The road ahead for housing is still, so far, looking promising," Jennifer Lee, an economist at BMO Capital Markets, said in a note to clients.
The pair of positive housing reports helped drive gains on Wall Street. The Dow Jones industrial average rose 24 points in morning trading. Homebuilder stocks jumped. Hovnanian Enterprises rose 4.2 percent to $6.24, while Lennar Corp. rose 0.4 percent to $41.74.
Housing starts jumped in the Northeast and Midwest, while they fell in the South and West. Permits rose in the South, West and Midwest, falling only in the Northeast.
The U.S. housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.
In addition, more people are seeking their own homes after doubling up with friends and relatives in the recession. That's leading to greater demand for apartments and single-family homes to rent.
Still, the supply of available homes for sale remains low. That has helped push up home prices. They rose nearly 10 percent in January compared with 12 months earlier, according to CoreLogic, the biggest increase in nearly seven years.
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