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Recovery Builds as Housing Numbers Pick Up Steam

A construction worker uses a hammer at a new housing development in San Mateo, California.
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A construction worker uses a hammer at a new housing development in San Mateo, California.

Groundbreaking to build new U.S. homes rose in February and new permits for construction rose to the highest level since 2008, a sign the nation's housing market recovery is gathering steam.

The Commerce Department said on Tuesday that starts at building sites for homes rose 0.8 percent last month to a 917,000-unit annual rate. That was in line with analysts' expectations of a 915,000-unit rate.

Starts for single-family units, which comprised about two thirds of the total, edged up 0.5 percent to their highest level since June 2008.

Permits for future home construction rose to a 946,000-unit rate, also the quickest since June 2008.

The housing market has regained some footing after a historic collapse that helped push the economy into a deep recession.

Home building added to national economic growth last year for the first time since 2005 and Tuesday's data reinforces the view that it will provide stronger support this year. That could help counter the drag expected from tighter fiscal policy as Washington works to shrink the federal budget deficit.

"Home building continues to recover and add to the recovery," said Gus Faucher, an economist at PNC Financial Services in Pittsburgh. "The rise in permits suggest we will have a solid spring."

Data for U.S. housing starts can be volatile and is sometimes subject to large revisions. The government revised upward its estimate for January housing starts to a 910,000-unit rate.

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