The U.S. Census Bureau and the Department of Housing and Urban Development released hugely promising data on February building permits earlier today, reporting a 5.1 percent increase from January and 34.3 percent increase from last year at an annual rate of 717,000.
Though housing starts were down 1.1 percent from January to 698,000, they were up an impressive 34.7 percent from February 2011. In addition, the data on permits, which included a 4.9 percent monthly increase for single-family authorizations, bodes extremely well for housing starts in March and the months ahead, considering permits are always filed in anticipation of new construction.
Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said in a Bloomberg story on the data that construction’s steady recovery will continue in the coming months.
“The housing market continues to recover at a very gradual rate,” Guatieri said, who, according to Bloomberg, had forecasted a 697,000 pace for housing starts. “The increase in permits likely flags further strength in the months ahead.”
That future activity could also mean more increases in builder confidence. As we reported earlier today, the NAHB’s HMI, which measures the optimism of builders, maintained its increases of the past five months, which have seen confidence levels double for the nation’s embattled builders. An index of 50 is indicative of overall builder optimism, and such permits could drive the index that much closer (it was 28 in its most recent form).
Sheree Bargabos, the president of a roofing and asphalt company, was quoted in Bloomberg’s piece voicing much of that new construction optimism.
“We have the wind at our back as the economy recovers and housing improves,” Bargabos said. “Growth is anticipated as the housing market recovers, driven by home affordability, improving home values and home remodeling activity.”
Housing completions bucked the trend, somewhat, for February’s data. Though privately-owned completions rose monthly by 6.2 percent, they were down 7.0 percent from February 2011.