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Home building stays strong
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March 16, 1999: 9:26 a.m. ET
February housing starts dip 0.6% but still keep relatively brisk clip
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NEW YORK (CNNfn) - The pace of new home construction slowed slightly in February, but still is moving at a blistering pace.
Housing starts fell 0.6 percent last month to an annual rate of 1.80 million, the Commerce Department said Tuesday. But this comes after the rate of home building in January hit its highest point in 10 years, jumping 3.8 percent to an annual rate of 1.883 million units.
Mitchell Held, economist at Salomon Smith Barney, said the figure, though off, still shows a booming housing sector.
He also cautioned that because of February weather, the numbers "tend to be extremely volatile this time of year."
Although the rate was slightly higher then the 1.755 million annual rate expected by analysts, the inflation-sensitive bond market showed no reaction to the news. The 30-year Treasury bond was recently up 6/32 to yield 5.507 percent, about where it was before the release.
February starts on new apartments fell 6.3 percent to 386,000 a year. The total starts rate in February was 9.4 percent higher than the level a year earlier, in February 1998, of 1.64 million, the Commerce Department said.
Though mortgage interest rates have edged higher this year -- topping 7 percent earlier this month -- analysts say a strong stock market and healthy job markets are putting a firm foundation under the housing market.
Regionally, building starts soared 35.7 percent in the Northeast during February to 209,000 a year and were up 8 percent in the Midwest to 349,000. But in the South, the nation's largest regional market, February starts were down 2.5 percent to an annual rate of 872,000 and in the West they plunged 15.9 percent to 369,000 a year.
The housing sector is expected to level off in 1999 after a sizzling year for sales and construction in 1998. On Monday, the National Association of Home Builders said its forward-looking Housing Market Index turned down for a third month in a row during March. But it also said builders' main complaints so far were finding employees to hire and finished lots to build on, implying buyer demand remained strong. 
-- from staff and wire reports
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Commerce Department
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