Sign of very gradual recovery - US housing construction rebounds
Construction of new homes has rebounded with a 22 percent increase in February after declining for eight consecutive months, giving the housing industry and its players some reason to celebrate.
The information released by the Commerce Department indicated that housing starts increased to 583,000 last month, a growth of 22 percent from 477,000 in January (based on seasonally adjusted annual rate). New construction of single-family homes also surged 1.1 percent to an annual rate of 357,000 against 353,000 in January. Construction of multi-family homes also increased by 80 percent as compared to January - New construction of buildings with 5 or more units increased to 212,000 from 118,000. This came as a surprise to most analysts who were expecting housing starts to decline. While the peak of 1.1 million housing starts of February 2008 still remains out of sight, the rebound has brought hope and relief. A marginal increase in applications for building permits also signals that the improvement may sustain in the near future too.
However, some analysts fear that this phenomenon may be short-lived as new home sales have not picked up.