US housing starts and building permits fall in Feb

| March 16, 2010 | 0 Comments
US housing starts and building permits fall in Feb

The Commerce Department has today revealed US housing starts fell during the month of February, while building permits were also down.

Both declines were attributed to the severe wintry weather that gripped parts of the US during the month.

According to the Commerce Department, construction of new US homes fell 5.9% during the month to a seasonally adjusted annual rate of 575,000 properties. However, this was slightly higher than the 570,000 units economists had forecast.

In the meantime, applications for building permits, a barometer of future home construction, fell by 1.6% to a seasonally adjusted annual rate of 612,000 in February.

Housing starts are up 0.2% compared with February 2009 but are down around about 75% from the peak in 2006.

Commenting on the figures, Omair Sharif, an economist for RBS Securities, said: “The underlying pace of home construction remains fairly steady.”

Meanwhile, Gary Bigg, an economist at Bank of America’s Merrill Lynch, added: “Snow storms over the eastern part of the country were a significant factor in reducing starts in February.”

In related news, the US central bank, the Federal Reserve, is expected to keep interest rates at the rate of between zero and 0.25% at a meeting today.

Interest rates in the world’s largest economy have been at the low level since December 2008 and the bank has previously said that as a result of subdued inflation and high unemployment, low interest rates are required for “an extended period”.

Many analysts are not expecting a rate increase until the latter half of this year.

In related news, yesterday the Fed revealed a marginal rise in US industrial production in February.

According to the central bank, industrial output rose by just 0.1% in the month and followed a 0.9% increase in January.

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