Housing starts fell 0.2% to an annualized pace of 907,000 in February. Economists were looking for a 910,000 level.
Building permits, however, jumped 7.7% to 1.01 million. This was much stronger than the 960,000 level expected.
“We think poor weather conditions continued to weigh on housing activity in February, limiting the strength of the payback,” said Bank of America Merrill Lynch economists ahead of the report. “Moreover, building permits were weak in January and the NAHB housing index declined in February. Looking forward, we expect a solid gain in activity in the spring season along with a gain in demand.”