US Housing Starts Highest Since 1973

The pace of home building soared to the highest level in nearly 33 years in January, according to a government report Thursday that showed a real estate market that continues to top expectations.

The Census Bureau reported that housing starts reached an annual pace of 2.28 million homes in January, compared to just under a rate of two million homes in December. Economists surveyed by Briefing.com forecast that housing starts would come in at an annual rate of 2.02 million in the month.

This year had the warmest January on record in the United States, according to a separate government report, which could have helped building. But it also could have been aided by mortgage rates retreating slightly from levels seen at the end of 2005. The average 30-year fixed rate mortgage rate was 6.15 percent in the month, according to mortgage financing firm Freddie Mac, down from 6.27 percent in December and 6.33 percent in November.

Building permits, seen as a sign of builders' confidence in the market, came in at an annual pace of 2.22 million in January, compared with the 2.08 million pace in December. Permits were expected to edge down to a 2.07 million.

There have been numerous signs of a softening in the real estate and home building markets in recent months, and most housing economists expect both home sales and new building to slip from record levels reached in 2005.