Make us your home page
Instagram

New home construction rises in February

In this photo from earlier this month, new home construction is underway in a neighborhood in Zelienople, Pa. On Thursday, the Commerce Department reported on a rise in U.S. home construction in February. 
[Associated Press]

In this photo from earlier this month, new home construction is underway in a neighborhood in Zelienople, Pa. On Thursday, the Commerce Department reported on a rise in U.S. home construction in February. [Associated Press]

WASHINGTON — U.S. builders broke ground on new homes at a faster pace in February, a sign that developers expect solid sales growth this year despite higher mortgage rates.

Housing starts rose 3 percent last month to a seasonally adjusted annual rate of 1.3 million, the Commerce Department said Thursday. Almost all of those gains came from construction of single-family houses, which rose 6.5 percent. Construction of apartment buildings fell 7.7 percent in February.

More Americans are looking to purchase homes as the job market has improved, but the supply of properties for sale has been relatively low even with additional construction. The increase in construction starts points to greater sales this year even though mortgage rates have climbed upward from recent lows, making monthly housing payments higher and hurting affordability.

Housing starts are running 7.5 percent higher than they did during the first two months of 2016. Builders last year started the most new homes since 2007, the year the Great Recession began as the housing market began to teeter.

Construction surged last month in the West, offsetting declines in the Northeast, Midwest and South that were largely caused by a decline in apartment building starts.

Still, growth in home building also appears to be tempered. Building permits — an indicator of future home construction — slipped 6.2 percent in February to an annual rate of 1.2 million.

Builders have been adding supply to the market, just not enough to address the tight inventory of existing homes that make up the bulk of the real estate market. The National Association of Realtors has reported that the number of existing homes on the market is near its lowest level since 1999, while the inventory of new homes on the market is near an eight-year high.

Demand among homebuyers has been strong as the unemployment rate has dipped to a healthy 4.7 percent. Yet buyers will likely borrow at higher rates than last year, a factor that could restrict the extent of price and sales growth.

The average 30-year fixed rate mortgage had a 4.21 percent interest rate, mortgage buyer Freddie Mac said last week. This marks a steep increase from a 52-week low rate of 3.41 percent.

New home construction rises in February 03/16/17 [Last modified: Thursday, March 16, 2017 10:05am]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. SOCom seeks civilian drone pilots to develop new technology through ThunderDrone

    Macdill

    TAMPA — For the last three years, Nicole Abbett has been using drones as part of her photography business, with clients like the city of Tampa and construction companies.

    Josh Newby, 31, Palm Harbor, of Tampa Drones fly's a drone in England Brothers park, Pinellas Park, 8/25/16. As drone popularity increases as a hobby and business, local governments are navigating a legal grey area- where, when, and how should drone flights be allowed?
  2. New apartment complex delivers unique floor plans



    Business

    RIVERVIEW — A new luxury apartment community has opened in the Progress Village area touting itself as a distinct living option just 10 miles from downtown Tampa.

    Alta at Magnolia Park dubs its new apartment community, that opened earlier this year in Riverview, a modern and distinct option for living just 10 miles from downtown Tampa.
  3. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  4. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  5. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.