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Home building data up
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February 19, 2002: 8:38 a.m. ET
Housing starts, building permits both better than Wall St. expectations.
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NEW YORK (CNN/Money) - New home construction data in January came at the highest rate in nearly two years, according to government data released Tuesday, as warm weather and low interest rates helped keep consumer demand for new homes strong despite a slow U.S. economy.
January housing starts rose 6.3 percent to a preliminary annual rate of 1.68 million new homes, according to the Census Bureau report. That's up from the revised 1.58 million rate in December. Analysts surveyed by Briefing.com were looking for a 1.6 million rate in January. It is the highest annual rate in any month since the 1.745-million rate of housing starts in February 2000.
New building permits, an indication of future home building activity, rose 3.1 percent to a 1.71-million rate in January. That's up from the 1.65 million rate in December, and it easily tops the forecast of Briefing.com's survey of analysts, who were looking for a drop to a 1.6 million rate in the month. January's rate is down slightly from the 1.72 million rate in January of 2001.
Credit Suisse First Boston Director of Economics Kathleen Stephansen told CNNfn's Before Hours Tuesday that warm weather in much of the nation may have helped the construction numbers top expectations, allowing builders to get an earlier-than-expected jump on some projects.
But she also said that relatively strong consumer confidence and spending data and an outlook for low interest rates should keep demand for new homes strong for the rest of the year.
"You did have a confluence of factors here that would have helped this," said Stephansen. "Mortgage rates continue to be stable and low. There's no reason to anticipate any major drop here." 
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