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class="alignleft" src="http://static.move.com/blogs/NewHomeConstruction-medium.jpg" alt="NewHomeConstruction medium Drop in February Home Construction Still Surpasses Expectations" width="212" height="148" title="Drop in February Home Construction Still Surpasses Expectations" />New home construction dropped 5.9 percent to an annual rate of 575,000 in February, according to the Commerce Department. CNN Money reports that despite the decline– which was a 0.2 percent increase from the previous year– the rate exceeded the expectations of economists from Briefing.com who predicted that housing starts would fall to an annual rate of 570,000.

id="more-366315">The amount of building permits issued in February dropped 1.6 percent from January’s revised rate of 622,000 to a seasonally adjusted annual rate of 612,000. This amount also surpassed economist expectations– they believed permits would fall to 601,000. The rate was up 11.3 percent from the previous year.

Construction of single-family homes remained relatively steady, dropping only 0.6 percent, while permits fell 0.2 percent. Mark Vitner, a senior economist at Wells Fargo, believes the trend is the result of the first-time home buyer tax credit.

“We had thought single family construction would hold up relatively well because builders needed to have some inventory to show prospective buyers in order for them to take advantage of the first-time homebuyer credit.”

The South saw the largest decline in housing starts with a 15.5 percent drop in February, while construction rose 10.6 percent in the Midwest and 7.9 percent in the West.

 - Jana Schreiber, Move Trends-Getter /> Email:Jana Schreiber@Move.com

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