Housing Starts Continue to Rise

Housing starts have risen 2.8% to the annual rate of 591,000.  This is the highest level since July. These starts were consistent with forecasts by economists that were surveyed by marketwatch.

The number of building permits, which is a seperate measure for construction, has also risen in turn with housing starts 17.8% over the last two months.

The government has stepped in an extended the first-time home buyers’ tax credit, which has directly affected the rise of this key index number. Analysts believe this should boost housing starts as spring arrives.

“It is a matter of time before the tax credit drives starts to new highs,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics in a note to clients.  The National Association of Home Builders said Tuesday that its builder sentiment index rose to a three-month high in February.