Snowstorm hits US housing market revival

WASHINGTON (AFP) - Construction of new houses in the United States slumped in February on freezing temperatures across the nation, breaking a rally that spurred hopes of a rapid recovery for the battered sector.

New construction starts were down 5.9 percent in February versus the month before, the Commerce Department said Tuesday, as analysts saw bad weather once again clouding their view of how well the US economy was recovering.

"It was tough to get the shovels into the ground in February so not surprisingly, home construction fell," said Joel Naroff of Naroff Economic Advisors.

"It will be nice to get through the weather-driven February data so we can start getting a better picture of what is really going on in the economy."

This February's construction figures were enough to beat market expectations, but not adequate to top a drastically revised estimate of how many homes were built in January 2010.

The Commerce Department said constructors broke ground on 611,000 new homes in January, more than the previous estimate of 591,000.

An estimated 575,000 new homes were built in February, up 0.2 percent from the same month a year before, when the housing market was still recoiling from the battering sustained by the subprime crisis.

The US housing sector is seen as key to getting the US economy back on its feet.

Looking to future construction, the Commerce Department said the number of new building permits issued fell 1.2 percent in February versus January, but was 11.3 percent higher than the year before.