U.S. housing starts
boosted by warmer weather; building permits fall
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[March 16, 2017]
(Reuters) - U.S. homebuilding jumped in February as unseasonably warm
weather boosted the construction of single-family houses to near a
9-1/2-year high, suggesting the economy remained on solid ground despite
an apparent slowdown in growth in the first quarter.
Housing starts increased 3.0 percent to a seasonally adjusted annual
rate of 1.29 million units, the Commerce Department said on Thursday.
January's starts were largely unrevised at a pace of 1.25 million units.
Economists polled by Reuters had forecast groundbreaking activity rising
to a rate of 1.26 million units last month.
Homebuilding was up 6.2 percent compared to February 2016.
Single-family homebuilding, which accounts for the largest share of the
residential housing market, surged 6.5 percent to a pace of 872,000
units last month, the highest level since October 2007.
Starts for the volatile multi-family housing segment fell 3.7 percent to
a pace of 416,000 units.
A robust labor market is supporting the housing market, helping it to
buck weakness in other parts of the economy.
Consumer, construction and business spending softened in January while
the trade deficit widened to a five-year high.
The Federal Reserve on Wednesday raised its overnight benchmark interest
rate by 25 basis points to a range of 0.75 percent to 1.00 percent and
forecast two more rate hikes this year. That was the third rate hike
since the 2008 financial crisis.
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Roofers work on new homes at a residential construction site in the
west side of the Las Vegas Valley in Las Vegas, Nevada April 5,
2013. REUTERS/Steve Marcus
The Atlanta Fed is forecasting gross domestic product increasing at a
0.9 percent annualized rate in the first quarter. Fed Chair Janet Yellen
told reporters on Wednesday that quarterly gross domestic product was
"noisy," and said policymakers had "confidence in the robustness of the
economy and its resilience to shocks."
In February, permits for future home construction fell 6.2 percent to a
rate of 1.21 million units. But single-family permits increased 3.1
percent to a pace of 832,000 units.
Building permits for multi-family units dropped 21.6 percent to a rate
of 381,000 units. Single-family permits are likely to remain high. A
survey on Wednesday showed homebuilders' confidence jumped in March to
its highest level since June 2005.
The surge in confidence is, however, unlikely to translate into a
homebuilding boom as builders continued to complain about rising
material prices, higher mortgage rates, and shortages of lots and labor.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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