A new report released on Tuesday said that builders began work on more houses in February and permits for future construction rose to the highest level in almost five years, indicating a housing recovery that is gaining strength.
New home construction rose almost 1 percent in February over January figures to a rate nearly 30 percent above figures reported in February 2012, the Commerce Department reported Tuesday. That's up from 910,000 in January. And it's the second-fastest pace since June 2008, behind December's pace of 982,000.
Meanwhile, building permits climbed almost 5 percent over January numbers, and are nearly 34 percent ahead of figures reported this time last year. Strong permit data bodes well for the spring building season, and could help juice the broader economy, experts say.
Single-family home construction increased to an annual rate of 618,000, the most in 4 and a half years. Apartment construction also ticked up, to 285,000. The housing market has regained some footing after a historic collapse that helped push the economy into a deep recession.
Home building added to national economic growth last year for the first time since 2005 and Tuesday's data reinforces the view that it will provide stronger support this year. That could help counter the drag expected from tighter fiscal policy as Washington works to shrink the federal budget deficit.
Despite the positive sales trends, many builders are facing higher costs for building materials and competition for land cleared for development. Some also are having trouble obtaining financing to buy land and cover construction costs.
