Following four consecutive months of gains, single-family housing starts in February were at a rate of 457,000, about 9.9 percent below the revised January figure of 507,000, according to the U.S. Department of Commerce.
Overall housing starts also declined, falling 1.1 percent to a seasonally adjusted annual rate of 698,000 units in February from a revised January estimate of 706,000. Still, February marked the second-best pace of new construction since October 2008.
"Builders are reporting increased buyer interest and are expecting demand for new homes to improve in the coming months, but continue to exercise caution regarding new projects until that interest translates into more signed sales contracts," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "This process is certainly being slowed by today's overly tight lending conditions, the difficulty of obtaining accurate appraisals on new construction and competition from distressed properties that can make it tough for prospective new-home buyers to sell an existing home."
"NAHB's most recent builder surveys have shown steady improvement in builder expectations for the next six months, and today's report reflects that optimism in the permit numbers, which are up across the board and are typically the most statistically reliable data," noted NAHB Chief Economist David Crowe. "At the same time, we believe that January's exceptionally good weather was a factor in pulling some single-family starts activity forward that might otherwise have occurred in February."
