Housing construction drops 5.9 percent in February

WASHINGTON (AP) — Housing construction fell in February as winter blizzards held down activity in the Northeast and South.

The decline highlighted the challenges facing builders as they struggle to emerge from the worst housing slump in decades.

The Commerce Department said today that construction of new homes and apartments fell 5.9 percent in February to a seasonally adjusted annual rate of 575,000 units, slightly higher than the 570,000 that economists were expecting. January activity was revised up to a pace of 622,000 units, the strongest showing in 14 months.

Economists characterized the February dip as weather-related although they said any housing rebound this year is likely to be modest at best given a variety of headwinds from record home foreclosures to high unemployment.

"It's tough when you have massive rain and snow storms over a large part of the nation to get much construction activity," said Joel Naroff, chief economist at Naroff Economic Advisors. "I am expecting housing to be a modest addition to economic growth for the rest of the year."

The February weakness reflected a modest 0.6 percent drop in single-family construction, which declined to 499,000 units. The more volatile multifamily sector plunged 30.3 percent to an annual rate of 76,000 units after having surged 18.5 percent in January.