February Increase in Single-Family Starts Strongest in 20 Years

Overall housing starts rose 2.8 percent in February to a seasonally adjusted annual rate of 1.77 million units, according to the U.S. Commerce Department. The gain was due entirely to the single-family sector, where starts rose 7.4 percent to a rate of 1.46 million units — their fastest pace since December 1978.

Multi-family starts, typically more volatile, retreated 14.3 percent to an annual rate of 312,000 units, partially offsetting a substantial gain registered in January. Starts rose in three out of four regions in February. The West's gain of 14 percent was the largest, while the Midwest and South posted more moderate gains of 0.8 percent and 0.9 percent, respectively. The Northeast was the exception to the rule, with a 9.3 percent decline that followed a sizeable increase in January.

“These exceptionally strong numbers, combined with upwardly revised figures for January and December, are ample evidence that housing, specifically residential fixed investment, is helping pull the economy out of recession,” said Gary Garczynski, president of the National Association of Home Builders (NAHB) and a builder/developer from Woodbridge, Va.

Building permits, which can be an indicator of future building activity, also rose in February. The volume of permits increased nearly 2 percent in February to a seasonally adjusted annual rate of 1.75 million units. Single-family permits rose 2.7 percent to a rate of 1.37 million units, while multi-family permits declined 1.3 percent to a rate of 381,000 units. Both were up from their fourth-quarter 2001 averages. Regionally, permits rose in all but the Midwest in February.