While the Commerce Department released a report on Thursday showing a rebound in new U.S. residential construction in the month of February, the report also showed a sharp pullback in building permits.
The report said housing starts jumped by 3.0 percent to an annual rate of 1.288 million in February after slumping by 1.9 percent to a revised 1.251 million in January.
Economists had expected housing starts to climb to a rate of 1.260 million from the 1.246 million originally reported for the previous month.
The bigger than expected increase in housing starts reflected a rebound in single-family starts, which surged up by 6.5 percent to a rate of 872,000.
On the other hand, multi-family starts saw a continued decrease, sliding by 3.7 percent to a rate of 416,000.
Meanwhile, the report said building permits tumbled by 6.2 percent to an annual rate of 1.213 million in February after surging up by 5.3 percent to a revised 1.293 million in January.
Building permits, an indicator of future housing demand, had been expected to drop to a rate of 1.260 million from the 1.285 million originally reported for the previous month.
Multi-family permits saw a substantial pullback, plunging by 21.6 percent to a rate of 381,000 in February after spiking by 22.1 percent to a rate of 486,000 in January.
The drop in multi-family permits was partly offset by a rebound in single-family permits, which jumped by 3.1 percent to a rate of 832,000.
On Wednesday, the National Association of Home Builders released a separate report showing that homebuilder confidence jumped to its highest level in almost twelve years in March.
The report said the NAHB/Wells Fargo Housing Market Index surged up to 71 in March from 65 in February. Economists had expected the index to inch up to 66.
With the much bigger than expected increase, the housing market index reached its highest level since hitting 72 in June of 2005.
by RTT Staff Writer
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