US housing starts rose more than expected in March to their highest level since November 2008 and permits to build new homes scaled a 17-month peak, offering hope the housing market recovery remained on course.
The US Commerce Department said today housing starts rose 1.6 per cent to a seasonally adjusted annual rate of 626,000 units. February's housing starts were revised up to show a 1.1 per cent increase, which was previously reported as a 5.9 per cent drop.
"Some of the worries about the housing market have been alleviated by this report," said Cary Leahey, an economist at Decision Economics in New York.
US stock index futures held on to small losses after the data, while Treasury debt prices were steady at slightly higher levels. The US dollar was little changed.
Groundbreaking for single-family homes slipped 0.9 per cent last month to an annual rate of 531,000 units after rising 5.7 per cent in February. Starts for the volatile multifamily segment surged 18.8 per cent to a 95,000-unit annual pace after falling 21.6 per cent the prior month.
The housing market recovery has stalled in recent months and sales have dropped after strong gains in the second half of 2009. The sector, a key factor behind the worst economic downturn since the Great Depression, remains one of the headwinds confronting the recovery.
Analysts are cautiously optimistic the improving economic conditions, particularly the resumption of job growth, will help put the sector back on an upward trend and March's housing starts data will be seen as a step in that direction.
A National Association of Home Builders survey today showed home-builder sentiment rose to a seven-month high in April as consumers rushed to take advantage of a home buyer tax credit. Better economic conditions also helped.
Reuters