Home builders broke ground on more new houses than expected in February, a sign that higher interest rates are not weighing down the housing market as much as they were earlier.
Housing starts jumped 9.8 percent in February to a seasonally adjusted annual rate of 1.45 million. Economists had expected an increase of just 0.1 percent to 1.31 million after the very depressed January figure came in much lower than expected.
Despite the unexpectedly strong gain in February, starts are well below where they were before the Federal Reserve started hiking interest rates. Compared with a year ago, starts are down 18.4 percent.
Single-family home starts rose 1.1 percent. Apartment and condo starts rose 24.1 percent.
On Wednesday, the National Association of Home Builders said that confidence among home builders improved in March, the third consecutive rise in sentiment.