During February new home construction surged in the Northeast, jumping nearly 89%! New home construction also increased in the Midwest and in the South.
Initial construction of U.S. homes unexpectedly surged in February, after an eight month decline, according to a report released today.
New housing construction rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January, according to the Commerce Department. It was the first time new housing construction increased in eight month, since June 2008 when they rose 11%.
Starts are down more than 47% from February 2008, when over 1.1 million new homes broke ground.
New construction of single-family homes, considered the core of the housing market, increased 1.1% to an annual rate of 357,000 versus 353,000 in January.
February’s increase was driven by a nearly 80% increase in construction of multi-family homes — new construction of buildings with 5 or more units. Construction of multi-family homes increased 80% to 212,000 from 118,000 in January 2009.
Applications for building permits, considered a reliable sign of future construction activity, rose 3% to 547,000 last month. Economists were expecting permits to fall to 500,000.
Even though the flood of new construction is a welcome sign, market analysts caution that the increase could be short lived and believes that this is a temporary rebound, not a recovery.
“The housing market may be thawing, but this month’s gain only brings the pace of total starts back up to that of December 2008,” said Celia Chen of Moody’s Economy.com.
“We see no specific factor that might explain this jump; multifamily starts are always noisy but this is exceptional,” said Ian Shepherdson of High Frequency Economics.
However, all this new construction likely means that the post Lehman crash is over – which is a really GOOD thing.
Happy St. Patty’s Day! May the luck of the Irish be with you!!!