Housing construction in the US fell by 5.9 percent in February as winter blizzards held down activity in the Northeast and South of the country. The decline highlighted the challenges facing builders as they struggle to emerge from the worst housing slump in decades.
The Commerce Department said that construction of new homes and apartments fell to a seasonally adjusted annual rate of 575,000 units, slightly higher than the 570,000 that economists were expecting. January activity was revised up to a pace of 622,000 units, the strongest showing in 14 months.
Homebuilders are trying to emerge from a severe housing downturn. A rebound in housing is seen as critical to sustaining the overall economic recovery.
The February weakness reflected a modest 0.6 percent drop in single_family construction, which declined to 499,000 units. The more volatile multi_family sector plunged 30.3 percent to an annual rate of 76,000 units after having surged 18.5 percent in January.
Activity dropped by 9.6 percent in the Northeast and 15.5 percent in the South, two regions hit by snowstorms in February. Building rose by 10.6 percent in the Midwest and 7.9 percent in the West.
Building permits, considered a good barometer of future activity, fell 1.6 percent to an annual rate of 612,000 units after having fallen a larger 4.7 percent in January.
Housing experts are forecasting that home sales will pick up in the near term but will weaken after tax credits expire at the end of April.
The National Association of Home Builders reported Monday that its survey of builder sentiment dropped by two points to 15 in March, underscoring the gloom in the housing market.
Builders said that harsh winter weather and the competition from deeply discounted foreclosures were dampening sales prospects. They said they were seeing fewer prospective buyers and were feeling less optimistic about the likelihood of sales over the next six months, according to the latest survey.|
Sales of new homes plunged 11 percent to a record low in January, the third consecutive monthly decline. Sales of previously occupied homes were down 7 percent, the sharpest drop since last June.