US housing starts slip in February

Starts on privately owned housing totaled an annual rate of 698,000 units, a pace 1.1 percent below the revised January estimate of 706,000, the Commerce Department said.

The upwardly revised January number marked the most robust construction starts since October 2010.

The pace of new building -- an indicator of the health of the country\'s construction industry -- was 34.7 percent above the level of February 2010, the Commerce Department reported.

Despite the February month-on-month decline, the overall trend shows that "starts are heading upward," said Celia Chen at Moody\'s Analytics.

Chen noted that the three-month average ending in February was at a 695,000 pace, above the 659,000 average in the three months ending in November and above the 616,000 12-month average.

"Homebuilders are gearing up for the spring selling season," she said.

"Although the pace of residential construction pales in comparison with normal pre-spring activity, it is slowly rising from the depths of the housing correction."

Building permits, a forward-looking indicator, rose for the second straight month in February, up a solid 5.1 percent from January to an annual pace of 717,000, the department said.

That was their highest level since October 2008; building permits were up 34.3 percent on a 12-month basis.

The US housing market is still bottoming out six years after a price bubble burst, posing a key challenge to the economy\'s recovery from a deep 2008-2009 recession, according to the Federal Reserve and economists.

Despite mortgage rates hovering at record lows, home sales remain depressed amid falling home prices, rising foreclosures and high unemployment, which, though slowly diminishing, stood at 8.3 percent in February.

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