Construction of new homes plummeted in February, as fierce winter weather froze housing starts in the Northeast and Midwest.
The Commerce Department says builders started construction at a seasonally adjusted annual rate of 897,000 homes in February, a steep 17 percent plunge from January. Housing starts slid 56.5 percent in the Northeast and 37 percent in the Midwest.
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Recent job growth, low mortgage rates and cheaper gasoline have yet to unleash spending by consumers on big ticket items such as housing. Consumers appear to be paying down debt, instead.
Builders expect a sharp increase in renters to hit the market. Approved building permits rose 3 percent to an annual rate of 1.09 million, with apartments accounting for the entire gain and offsetting a decrease in permits for single-family houses.