The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units. The increase in the number of new housing projects that builders broke ground on in February overcame economists’ forecasts for yet another drop in activity. February’s pickup was led by a big increase in apartment construction. Some economists said the new housing figures offered a glimmer of hope. Overall housing construction activity fell to a pace of 477,000 units in January, according to revised figures. That was a little higher than first reported but still marked a record low.Applications for building permits, considered a reliable sign of future activity, also rose in February by 3 percent to an annual rate of 547,000. Economists were expecting permits to fall to a pace of 500,000 units.
Even with February’s rare burst of activity, housing construction is down a whopping 47.3 percent from a year ago.The collapse of the once high-flying housing market has been devastating to the United States’ economic health. Its spreading fallout has contributed to big pullbacks by consumers and businesses alike, plunging the economy into a recession now in its second year. The Obama administration has announced a $75 billion program to stem skyrocketing home foreclosures, which have dumped even more properties on an already crippled market. Tighter lending standards for home mortgages, rising defaults and fear about the housing market’s future have sidelined buyers, an absence felt acutely by homebuilders.