Official figures showed today that US housing starts rebounded with a strong 9% jump in February, defying expectations of a further slide in the troubled property market.
However, weak levels of building permits in the month suggest that housing starts could be disappointing in March.
The Commerce Department's report showed housing starts at an annualised pace of 1.525 million, well ahead of Wall Street forecasts of 1.445 million.
The agency revised down its estimate for January to a pace of 1.399 million from 1.408 million. The initial estimate had marked the lowest level of starts in nine years.
Even with the rebound in February, housing starts are down 28.5% from a year earlier, with the construction of new homes falling last year as interest rates rose and demand slowed following years of spectacular growth.
And despite the increase in new starts, building permits continued to fall in February and were down 2.5% on the month to 1.532 million, signalling future weakness.
In the past year, permits have dropped 28.6%.
The housing report was released as Fed policymakers gathered in Washington for a two day meeting. Most economists expect the Fed to keep its short term interest rate pegged at 5.25%.
