A worker finishes a roof on a new home in Chicago. (Nam Y. Huh / Associated Press )
New residential construction increased in February, while builders look to put up more homes in the near future to meet rising demand for housing--a positive trend for the broader economic recovery.
Housing starts jumped 0.8% from revised January figures to a seasonally adjusted annual rate of 917,000, the Commerce Department said Tuesday.
The rate of new construction was slightly higher than economists polled by Bloomberg News expected as both single-family construction and apartment and condo building climbed. New construction fell month-to-month in the West and South, but increased in the Northeast and Midwest.
Compared to February last year, nationwide housing starts increased 27.7%.
Home construction has helped lead the economy out of prior downturns but was stubbornly slow after the latest recession. Lately, however, home building has shown signs of improvement as home prices have risen and the inventory of homes has dwindled.
The Commerce Department said building permits -- an indication of future building -- rose 4.6% from the revised January rate. Last month’s 946,000 annual rate represented a 33.8% increase from February 2012.
The Labor Department said this month that the construction industry added 48,000 jobs in February -- the largest monthly increase since March 2007.
Despite the positive developments, the National Assn. of Home Builders said Monday that builder confidence fell this month. The group said demand is outstripping the ability of builders to deliver new homes as they deal with rising labor and material costs and a lack of ready-to-build lots.
Builders completed slightly fewer private housing units in February than the month prior, as multifamily unit completions fell. The rate of single family home completions rose 3.6%.
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