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Housing starts in US stage a surprise surge in February
By Shobhana Chandra |
March 18, 2009, Wednesday
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HOUSING starts in the United States unexpectedly surged in February from a record low on a rebound in condominiums and apartments that signaled builders cut too deeply as the credit crunch intensified at the end of 2008.
Work began on 583,000 homes at an annual rate, a 22-percent increase from January that was the biggest jump since 1990, the Commerce Department said yesterday in Washington. Multi-family units climbed 82 percent.
"Any letup would be encouraging," Michelle Meyer, an economist at Barclays Capital Inc in New York, said before the report. "We may begin to see housing starts reach a bottom in the second half, contingent on a recovery in financial markets and in the economy. I don't think the end is too far out."
Building permits, a sign of future construction, rose less than starts, indicating construction may again slow. Developers are still contending with record foreclosures that depress prices and profits, and put pressure on the Federal Reserve, which was set to meet yesterday and today, and the Obama administration to solve the credit crisis.
A separate report showed producer prices rose 0.1 percent in February, less than the 0.8-percent gain in the previous month. On a year-on-year basis, wholesale prices fell 1.3 percent, with a 4-percent increase after stripping out food and energy costs.
Treasuries were little changed after the reports, with benchmark 10-year notes yielding 2.94 percent at 8:35am in New York, from 2.96 percent late Monday. Futures on the Standard & Poor's 500 Stock Index were unchanged at 753.80.
Starts were projected to fall to a 450,000 annual pace, according to the median forecast of 71 economists surveyed by Bloomberg News. Estimates ranged from 400,000 to 500,000. January's starts were revised up to 477,000 from a previously estimated 466,000.
Permits, a sign of future construction, rose 3 percent to a 547,000 annual pace. They were forecast to drop to a 500,000 annual rate, according to the survey median.
Construction of single-family homes climbed 1.1 percent to a 357,000 rate, the report showed. Work on multifamily homes, such as townhouses and apartment buildings, surged to a 226,000 pace from 124,000 in January.
The increase in starts was led by an 89-percent surge in the northeast of the country.
Work began on 583,000 homes at an annual rate, a 22-percent increase from January that was the biggest jump since 1990, the Commerce Department said yesterday in Washington. Multi-family units climbed 82 percent.
"Any letup would be encouraging," Michelle Meyer, an economist at Barclays Capital Inc in New York, said before the report. "We may begin to see housing starts reach a bottom in the second half, contingent on a recovery in financial markets and in the economy. I don't think the end is too far out."
Building permits, a sign of future construction, rose less than starts, indicating construction may again slow. Developers are still contending with record foreclosures that depress prices and profits, and put pressure on the Federal Reserve, which was set to meet yesterday and today, and the Obama administration to solve the credit crisis.
A separate report showed producer prices rose 0.1 percent in February, less than the 0.8-percent gain in the previous month. On a year-on-year basis, wholesale prices fell 1.3 percent, with a 4-percent increase after stripping out food and energy costs.
Treasuries were little changed after the reports, with benchmark 10-year notes yielding 2.94 percent at 8:35am in New York, from 2.96 percent late Monday. Futures on the Standard & Poor's 500 Stock Index were unchanged at 753.80.
Starts were projected to fall to a 450,000 annual pace, according to the median forecast of 71 economists surveyed by Bloomberg News. Estimates ranged from 400,000 to 500,000. January's starts were revised up to 477,000 from a previously estimated 466,000.
Permits, a sign of future construction, rose 3 percent to a 547,000 annual pace. They were forecast to drop to a 500,000 annual rate, according to the survey median.
Construction of single-family homes climbed 1.1 percent to a 357,000 rate, the report showed. Work on multifamily homes, such as townhouses and apartment buildings, surged to a 226,000 pace from 124,000 in January.
The increase in starts was led by an 89-percent surge in the northeast of the country.
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