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After a bad Jan., Feb. permits up 22%

Housing starts surged a surprising 22.2 percent in February over January's levels, the Commerce Department reported yesterday. Economists attributed part of the spike to bad weather in December and January that delayed construction.

Construction contractor Mike Day works on building a new home in Springfield, Ill., Monday. Despite the housing industry's gain, starts were down 47.3 percent from February 2008.
Construction contractor Mike Day works on building a new home in Springfield, Ill., Monday. Despite the housing industry's gain, starts were down 47.3 percent from February 2008.Read moreSETH PERLMAN / Associated Press

Housing starts surged a surprising 22.2 percent in February over January's levels, the Commerce Department reported yesterday.

Economists attributed part of the spike to bad weather in December and January that delayed construction.

"One should not make too much noise over the 88.6 percent jump in starts in the Northeast or the 58.5 percent jump in the Midwest," said IHS Global Insight economist Patrick Newport. "The percentage jumps were huge because the levels have fallen so low."

Starts were 47.3 percent below February 2008 levels nationally, the Commerce Department said. Building permits were up 3 percent month over month, but they were 44.2 percent below February 2008 levels.

Joel L. Naroff, chief economist at TD Bank N.A. in Cherry Hill, said double-digit changes in the numbers month over month make it "hard to take the increase as a sign of a new day for the housing sector."

Instead, Naroff said, the data suggest that the numbers for January were not as great as reported, and that in February "they didn't suddenly see the light and start building."

"More than likely, as is not unusual with winter construction numbers, it was just weather and the pattern of activity," he said.

No separate data were available for the eight-county Philadelphia metropolitan region, which is included in the Commerce Department's statistics for the northeastern United States.

Even the National Association of Home Builders struggled to be upbeat about the report.

"This gain only reflects a modest rebound from January, which was the worst month in history for new-home production," said the association's chief economist, David Crowe.

Most of the gain was the result of "characteristic volatility on the multifamily side," with single-family housing starts up just 1.1 percent month over month, Crowe said.

Multifamily starts rose 82.3 percent nationally.

The West registered a 24.6 percent decline in starts, as builders in that region continued to deal with competition from a growing inventory of foreclosures.

Builders took out a larger volume of single-family permits in February - 11 percent above January - "suggesting a glimmer of hope for the prime home- buying season," said association chairman Joe Robson.

In fact, the stability in permit activity from December through February suggests to Naroff that the housing sector is bottoming "one more time."

"And if that is the case," he said, "I can only say hurrah."