Housing Starts Better Than Expected in February

Construction of new homes in the U.S. in February rose more than economists had forecasted, according to Bloomberg. The increase represents the strongest single-family building in more than eight years, and affirms continued consumer confidence in demand for residential real estate.

According to the article, housing starts in February grew 5.2 percent to a 1.18 million annualized rate from a 1.12 million pace the prior month. On a year-to-year basis, total housing start-ups were up 31 percent in February. Although housing start-ups are on the rise, the number of permits for future construction fell slightly; suggesting any additional gains in coming months may be limited.

The reasons for the increase in start-ups is attributed to steady employment growth, a decrease in layoffs, and a pickup in wage growth; creating the feel of job security, which is an important factor for potential home buyers. An improvement in the selection of available properties to first-time buyers is also shifting the housing recovery into high gear.