US homebuilding bounced back sharply in February as the slowdown from cold weather eased, while permits fell, signaling an acute shortage of houses continues to underpin residential construction.
Source: US Census Bureau
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Housing starts surged 6.8% to a seasonally adjusted annual pace of 1.769 million units last month. Figures for January were revised higher to a rate of 1.657 million units from the initially reported 1.638 million units.
Permits for future homebuilding dropped 1.9% to a rate of 1.859 million units. They rose in January to record-high since May 2006.
Even though mortgage rates were rising as Fed tightens monetary policy to fight high inflation, homebuilding is likely to remain backed by a shortfall of homes available for sale.
The US central bank raised its policy interest rate by 25 basis points, the first hike in over three years. The Fed laid out an aggressive plan to push borrowing costs to restrictive levels by 2023.