U.S. housing starts climbed 2.8% in February to 1.769 million, contrary to expectations of a decline. The increase leaves starts growing at the highest rate since December of 1998 and at the fastest pace since December of 1978. The gain follows an upwardly revised 1.721 million January pace from 1.678 million previously.
Gains were concentrated in the single family sector, where starts activity rose 7.4% after a 3.4% gain. Multi-family starts declined 14.3% after a 25.5% surge in January.
Geographically, activity was the strongest in the West with a 14.0% rise following a 3.6% drop. Starts in the Midwest and South rose a tame 0.8% and 0.9%, respectively. Activity in the Northeast fell 9.3% after jumping 11.8%.
Permits were up 1.8% to a 1.752 million unit clip, following a revised 1.721 million unit rate (1.706 million previously).
Overall, while low mortgage rates remain a crucial support to the housing sector, unseasonably warm weather looks to again have been a culprit. This is shaping up to be a great first half for homebuilders, as a recovering economy combined with still low mortgage rates should underpin the sector through the second quarter. From Standard & Poor's Global Markets