WASHINGTON – U.S. home building projects started in February fell by 0.6 percent to a higher-than-expected annual rate while building permit activity, a sign of future construction plans, dropped off 7.8 percent, a government report on Tuesday showed.
The Commerce Department said housing starts set an annual pace of 1.065 million units in February, higher than the 990,000 expected by economists. The January starts figure was revised upward to 1.071 million from the 1.012 million originally reported.
Prices for U.S. Treasury bonds were down after the stronger-than-expected data while stock futures stayed high.
Still, some analysts were skeptical that there is long-lasting improvement in the beleaguered housing market.
“I wouldn’t put anything in that little bounce. The housing industry is in a recession,” said Josh Stiles, Bond Strategist at IDEAGlobal in New York.
Building permits fell 7.8 percent to an annual rate of 978,000, the slowest pace since a 974,000 rate set in September 1991. Economists polled by Reuters had predicted forecast February permits at 1.020 units after the 1.061 million rate of January.
Compared to a year ago, housing starts were down 28.4 percent. But for single-family homes, starts were off 40.5 percent from a year ago – the largest year-over-year drop since January 1991 when they fell by 45.1 percent.
