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Foul weather hits February housing starts

Housing starts in the United States fell last month as record snowfall in parts of the country hampered construction, while fewer building permits signaled demand is stagnating.

Builders broke ground on 575,000 homes at an annual rate last month, down 5.9 percent from January's revised 611,000 pace, which was higher than initially estimated, Commerce Department figures showed Tuesday in Washington. February starts reflected declines in the Northeast and South.

Mounting foreclosures are making it more difficult to clear inventories, keeping pressure on prices and discouraging new construction. The economy has yet to create the sustained job growth that could invigorate housing demand.

The report "definitely reflects the severe weather effect," said Ellen Zentner, senior U.S. macroeconomist at Bank of Tokyo-Mitsubishi UFJ Ltd. in Manhattan. "Housing has now got enough support that it has stabilized. With or without support, the housing recovery will be slow going."

A separate report showed prices of goods imported into the United States declined more than anticipated, pointing to few signs of inflationary pressure from abroad.

The import price index fell 0.3 percent, the first decline in seven months, Labor Department figures showed. Economists had forecast a 0.2 percent drop.

- Bloomberg News


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