Lucia Mutikani
Province
WASHINGTON — U.S. housing starts and permits rebounded in February from record lows, rising for the first time in 10 months, according to data yesterday that gave a glimmer of hope for the recession-hit economy.
Analysts said while the data did not mark a change in trend for the depressed housing market, it hinted at some stability that could ease pressure on the economy going forward.
The U.S. Commerce Department said housing starts jumped 22.2 per cent to an annual rate of 583,000 units last month from 477,000 units in January. It was the biggest percentage rise since January 1990 and the first gain since April.
“Even if we get housing starts just sort of bouncing along the bottom for a while, at least that means they won’t be subtracting from GDP growth,” said Bill Cheney, economist at John Hancock Financial Services in Boston.
U.S. stocks climbed in choppy trade on the data, while the U.S. dollar rose against the yen.
The data came as the Federal Reserve’s policy-setting committee prepared to open a two-day meeting at which officials are expected to hold the benchmark interest rate in the current range of zero to 0.25 per cent.
New building permits, which give a sense of builders’ home construction plans, rose 3.0 per cent to 547,000 units last month from 531,000 units in January. Like the rise in starts, the increase was the first since April.
The bounce in both groundbreaking activity and future building plans comes in the wake of a severe slump that has helped push the financial sector into crisis.
Compared to a year ago, housing starts were down 47.3 per cent in February and permits were off 44.2 per cent.
With the housing market at the centre of the meltdown, some measure of stability in the sector is crucial to rescuing the economy.
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