U.S. builders started more houses and apartments in February, while requesting permits for future construction at the fastest pace in 4 1/2 years.
The increases point to a housing recovery that is gaining strength.
The Commerce Department said Tuesday that builders broke ground on homes last month at a seasonally adjusted annual rate of 917,000.
That's up from 910,000 in January. And it's the second-fastest pace since June 2008, behind December's pace of 982,000.
Single-family home construction increased to an annual rate of 618,000, the most in 4 1/2 years. Apartment construction also ticked up, to 285,000.
The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 per cent to 946,000. That was also the most since June 2008, just a few months into the Great Recession.
The U.S. housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.
In addition, more people are seeking their own homes after doubling up with friends and relatives in the recession. That's leading to greater demand for apartments and single-family homes to rent.
Supply remains low
Still, the supply of available homes for sale remains low. That has helped push up home prices. They rose nearly 10 per cent in January compared with 12 months earlier, according to CoreLogic, the biggest increase in nearly seven years.
The number of previously occupied homes for sale has fallen to its lowest level in 13 years.
And the pace of foreclosures, while still rising in some states, has slowed sharply on a national basis. That means fewer low-priced foreclosed homes are being dumped on the market.
Those trends, and the likelihood of further price gains, have led builders to step up construction. Last year, builders broke ground on the most homes in four years.
Homebuilders have become much more confident over the past year.
But in March, a measure of home builder confidence fell for the second straight month over concerns that demand for new homes is exceeding supplies of land, building materials and workers. In the short term, that could slow sales.
But the survey noted that the outlook for sales over the next six months rose to its highest level in more than six years.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy.
Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the homebuilders.