Singlefamily housing starts surge 11.6 in February
Singlefamily building permits increase 1.0
Completions soar 20.2; houses under construction up 0.3

WASHINGTON, March 19 Reuters U.S. singlefamily homebuilding rebounded sharply in February, hitting the highest level in nearly two years, boosted by mild temperatures and a persistent shortage of previously owned houses on the market.

Despite the hurdle created for many firsttime buyers by higher mortgage rates, builders are cutting prices and offering other incentives to increase sales. They are also reducing the size of the homes being built to manage higher material costs.

The report from the Commerce Department on Tuesday also showed permits for the future construction of singlefamily housing units rose to more than a 112year high last month. With mortgage rates gradually trending lower on expectations the Federal Reserve will start cutting interest rates by June, homebuilding could contribute to economic growth this year.

Singlefamily starts could remain strong in the next couple of months as builders continue to see demand for new builds despite the headwinds facing buyers, said Daniel Vielhaber, an economist at Nationwide. Rate incentives from builders continue to help buyers afford homes on the new side of the market.

Singlefamily housing starts, which account for the bulk of homebuilding, surged 11.6 to a seasonally adjusted annual rate of 1.129 million units last month, the Commerce Department39;s Census…