February saw a significant resurgence in homebuilding, recovering from the January slump caused by adverse weather conditions that hampered new housing starts.
According to the Census Bureau’s announcement on Tuesday, if the February momentum continues, U.S. homebuilders are on track to initiate construction on 1.5 million homes over the next year.
This represents a robust growth of 10.7% over the January seasonally adjusted annual rate of 1.3 million, surpassing the expectations of a consensus forecast of 1.4 million from a Dow Jones Newswires and Wall Street Journal economist survey.
Moreover, the issuance of building permits, a bellwether for future construction activities, outperformed forecasts by climbing 1.9% from January, reaching a seasonally adjusted annual pace of 1.5 million.
This positive trend in homebuilding could provide much-needed relief to the housing market, which is currently struggling with a shortage of available homes for sale. This shortage is partly due to homeowners clinging to their low mortgage rates secured during the pandemic, showing hesitance to put their houses on the market.
Nonetheless, economists typically advise caution when interpreting trends from a single month’s data on housing starts. They note that these figures can be significantly influenced by weather conditions and tend to exhibit considerable volatility, with potential for both sharp increases and decreases.
