WASHINGTON (AP) — Builders began construction on more homes in February, and permits for future construction rose at their fastest pace since 2008. The increases point to a housing recovery that is gaining strength.
The Commerce Department said on Tuesday that builders broke ground on houses and apartments last month at a seasonally adjusted annual rate of 917,000. That rate was 910,000 in January. February’s pace was the second-fastest since June 2008, behind December’s rate of 982,000.
Single-family home construction increased to an annual rate of 618,000, the most in four and half years. Apartment construction also ticked up, to 285,000.
The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent to 946,000. That was also the most since June 2008, just a few months into the recession.
The figures for January and December were also revised upward. Housing starts have risen 28 percent over the last 12 months.
Separately, a private report showed that the number of Americans with equity in their homes increased last year. That suggested that one of the biggest drags from the housing crisis was easing, and it could clear the way for more people to put homes on the market.
“The road ahead for housing is still, so far, looking promising,” Jennifer Lee, an economist at BMO Capital Markets, said in a note to clients.
The housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.
Still, the supply of available homes for sale remained low. That has helped push up home prices. They rose nearly 10 percent in January compared with 12 months earlier, according to CoreLogic, a research firm, the biggest increase in nearly seven years.
Higher prices mean more Americans have equity in their homes. Last year, about 1.7 million Americans went from owing more on their mortgages than their homes were worth to having some ownership stake, CoreLogic reported on Tuesday. Still, 10.4 million households, or 21.5 percent of those with a mortgage, remain “under water,” or owe more on their home than it is worth.
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