WASHINGTON – U.S. builders started more homes in February, and permits for future construction rose at the fastest pace in 4 1/2 years. The increases point to a housing recovery that is gaining strength.
The Commerce Department said Tuesday that builders broke ground on houses and apartments last month at a seasonally adjusted annual rate of 917,000. Thats up from 910,000 in January. And its the second-fastest pace since June 2008, behind Decembers rate of 982,000.
Single-family home construction increased to an annual rate of 618,000, the most in 4 1/2 years. Apartment construction also ticked up, to 285,000.
The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent to 946,000. That was also the most since June 2008, just a few months into the last recession.
And the figures for January and December were also revised higher. Overall housing starts have risen 28 percent higher over the past 12 months.
Separately, a private report showed the number of Americans with equity in their homes increased last year. That suggests one of the biggest drags from the housing crisis is easing and could clear the way for more people to put homes on the market.
The road ahead for housing is still, so far, looking promising, said Jennifer Lee, an economist at BMO Capital Markets.
The pair of positive housing reports helped drive early gains on Wall Street. But stocks edged lower later in the day as investors awaited the outcome of a vote on an unpopular bailout plan in the European nation of Cyprus.
The Dow Jones industrial average was down 35 points in afternoon trading.
Housing starts jumped in the Northeast and Midwest, while they fell in the South and West. Permits rose in the South, West and Midwest, falling only in the Northeast.
The U.S. housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.