WASHINGTON – Building permits for private housing last month were issued at a seasonally adjusted rate of 1.532 million housing units per year, slowing 2.5 percent from the January rate of 1.571 million units and 28.6 percent from the February 2006 estimate, according to a report today by the U.S. Commerce Department’s Census Bureau and the Department of Housing and Urban Development.
Single-family permits declined 3.1 percent to a rate of 1.089 million units per year in February, the lowest since December 1997.
Housing construction starts rose 9.0 percent to a seasonally adjusted rate of 1.525 million units per year, from a January rate of 1.399 million that was the slowest since 1997. But though the pace of new construction in February was well above the 1.45 million median estimate in a Bloomberg News poll of 64 economists, it still lagged the year-ago rate by 28.5 percent.
Single-family housing starts surged 10.3 percent to an annual rate of 1.220 million units per year.
Total housing starts had slowed 14.3 percent in January, and single-family starts, 11.2 percent.
In the Northeast, housing starts plunged 29.7 percent as bitter cold replaced January’s unseasonable warmth. Housing permits also fell in the region, with 26.0 percent fewer issued last month than in January, and 30.7 percent fewer than in February 2006.
But, as gains in the warmer South and West more than offset the losses in the Northeast, the national report eased analyst’s fears that a worsening slump might drag down the U.S. economy. “The drag from residential construction will be diminishing through the year,” Richard DeKaser, chief economist at National City Corp. in Cleveland, told Bloomberg.
Confidence among U.S. builders retreated this month, however, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
The national HMI slipped 3 points to 36, from February’s eight-month high of 39 points. (Fifty is the neutral level; higher levels indicate more builders see sales conditions as good than as poor.) In the Northeast, where confidence was highest, the HMI slipped 2 points to 41.
“Builders are uncertain about the consequences of tightening mortgage lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout … [But] The fundamentals of today’s housing market still are relatively strong,” said NAHB Chief Economist David Seiders.
Additional information on the government housing report is available at www.census.gov/newresconst. The full NAHB builder confidence report can be found at www.nahb.org.
