Housing starts rebounded in February from a nine-year low, easing concern that the U.S. real-estate slump will worsen and threaten the economic expansion.
By Shobhana Chandra
March 20 (Bloomberg) -- Housing starts rebounded in February from a nine-year low, easing concern that the U.S. real-estate slump will worsen and threaten the economic expansion.
Builders broke ground on new homes at an annual rate of 1.525 million last month, up 9 percent from the prior month and more than economists forecast, the Commerce Department said today in Washington. Building permits fell 2.5 percent.
The numbers eased speculation that climbing defaults on subprime mortgages would put additional homes on the market, leading builders to halt more projects and fire workers. At the same time, swings in the monthly figures don't convey the stability desired by Federal Reserve policy makers, who meet today and tomorrow to set interest rates.
``We aren't getting any worse, but we aren't getting much better either,'' said Brian Jones, an economist at Citigroup Global Markets Inc. in New York. ``The quicker we get the inventory problem behind us, that sets a platform for an improvement in the latter half of the year.''
Speculation that the housing recession will deepen has mounted in the past month as delinquencies and foreclosures on subprime loans increased. Countrywide Financial Corp., the biggest mortgage provider, tightened standards and the Fed has warned lenders to be sure borrowers can repay debts.
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