Construction on new U.S. homes slumped 17% in February, mostly because of heavy snowfall that sidelined builders in the Northeast and Midwest. But nationwide permits for future construction rose to the second highest level since the end of the Great Recession, suggesting that construction will pick up in the spring. Housing starts sank to an annual rate of 897,000 in February from a revised 1.08 million in January, the government said Tuesday. Economists polled by MarketWatch had expected starts to total a seasonally adjusted 1.03 million. New construction in the Northeast tumbled 56% to mark the lowest rate since 2009. Starts also declined 37% in the Midwest, according to Commerce Department data. Meanwhile, permits for new construction, a sign of future demand, rose to an annual rate of 1.09 million from January's upwardly revised level of 1.06 million. The steady rise in permits is a sign that builders plan to ramp up construction as they usually do when the weather warms and the spring buying season kicks in.
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