Read one report and feel optimistic; take a look at another and shake your head in frustration. Housing remains a weak spot in the economy, and the numbers this week prove that the recovery is still choppy. Although home construction fell a little more than 1 percent from January, permits for new construction rose to the highest level in more than three years. New building permits in February increased 5.1 percent from January, to an annual rate of 717,000 and the highest level since October 2008.
The week began with a report about builder sentiment, which continues to be upbeat since the housing bubble burst five years ago. The National Association of Home Builders index remains at its highest level since 2007, but a spokesman cautioned that a surplus of inventory and tight lending standards are still obstacles to a housing recovery.
Construction of multifamily homes increased by 21 percent in the past year, possibly due in part to renter demand, while building of single-family homes, the majority of housing starts, fell by nearly 10 percent.
The stock market reacted negatively Wednesday to news that sales of previously-owned homes dropped by 0.9 percent in February from a month earlier. Although it was the strongest February in five years, investors were expecting sales to be better as we head into the traditionally busy spring season.
While rising mortgage rates could be a hindrance to sales, it could also spur buyers to get moving and lock in a still-low rate.
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