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And construction starts on single-family homes jumped to the highest level in nearly 10 years, adding supply to ease the strong demand for houses. Construction may have been helped by the unseasonably warm month of February, as total housing starts rose three percent to a seasonally-adjusted annual rate of 1.29 million units, its highest level since October. The result was in line with analyst forecasts and 6.2 percent above the same month last year. Single-family units posted a second month of strong starts, jumping 6.5 percent to 872,000 new units, a level not surpassed since October 2007. However, starts on multi-family dwellings with more than five units went the other way, falling 7.7 percent to 396,000. "Homebuyers should be pleased with today's new construction numbers," Ralph McLaughlin, chief economist at Trulia, said in a research note. "This means a healthy dose of new homes will be available this spring in an otherwise inventory-constrained market." However, the number of permits for new housing construction fell 6.2 percent to an annual rate of 1.21 million, driven by a 26.9 percent monthly drop in authorizations for buildings of five or more units, which could indicate falling supply ahead. Kristin Reynolds of IHS Markit said building permits are not affected by weather conditions and therefore are a more accurate indicator than housing starts. "Building permits in February retreated in all areas except the Mid-West," she said. With analysts saying many young people may be preparing to leave their parents' homes in the current economic recovery, but still reticent to take on mortgages to buy a home, builders have favored the construction of multi-unit buildings to serve the rental market, leaving a tight supply of houses.
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