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Housing Outlook Slips in February

Housing starts and building permits drop in February, though they remain above year-ago levels, in yet another set of mixed signals on the pace of the housing recovery.



) - The outlook on home construction slipped as gauged by February housing starts and building permits data from the

Commerce Department


Housing starts, which had taken a turn into positive growth in January, dipped below January's level in February. Housing starts of 575,000 in February represented a 5.9% drop below the revised January estimate of 611,000. Single-family housing starts, though, were down more modestly, showing only a 0.6% dip from January's revised figure of 502,000.

Building permits, which had slid last month also, declined by 1.6% in February. There were 612,000 building permits authorized in February, versus the January level of 622,000, which was already a disappointing sign of the short-term construction outlook. Single-family housing authorizations, like housing starts, also declined modestly, less than 1%.

Building permits and housing starts increased in comparison to the year-ago levels. However, the overall outlook for housing continues to provide lots of data noise and mixed signals in the noise. Severe winter weather was also a wildcard in the housing slowdown.

On the upside, recent foreclosure data from RealtyTrac was encouraging. Meanwhile, one of the creators of the Case-Shiller Home Price Index said that home prices were bottoming out, and Barclays Capital's chief economist declared this week that the home market would rebound this year; a point also made by

Warren Buffett

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in his annual letter to shareholders.

Still, The National Association of Home Builders/Wells Fargo index of builder confidence dropped to 15 this month from 17 in February, the Washington-based group reported on Monday.

-- Reported by Eric Rosenbaum in New York.

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