New construction of homes in the united States plunged in February as severe winter weather gripped large parts of the country, according to Commerce Department data published Tuesday.
Housing starts plummeted 17 percent from January to an annual rate of 897,000 units. Starts in single-family homes, which account for two-thirds of the market, dropped 14.9 percent.
In the heavily populated Northeast, pummelled by unusually frigid weather and snowstorms, housing starts dived 56.5 percent, a monthly record, the department said.
Building permits, an indicator of future construction activity, rose 3.0 percent to an annual rate of 1,092,00. But the gain was due to a jump in permits in the volatile multi-family housing sector, while permits for single-family housing fell 6.2 percent.
Compared with a year ago, February housing starts were down 3.3 percent and building permits were up 7.7 percent.
The housing market has remained sluggish despite solid jobs growth and low mortgage interest rates amid stagnant incomes and tight lending limits imposed after the 2006-2007 market crash.
"The underlying trend in housing construction is more or less flat, we think, and we see no reason for that to change in the near-term, regardless of the month-to-month noise," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.