Groundbreaking to build homes rose in February and new permits for construction climbed to the highest level since 2008, a sign the nation's housing market recovery is gathering steam.
The Commerce Department said on Tuesday that starts at building sites for homes rose 0.8 percent last month to a 917,000-unit annual rate. That was in line with analysts' expectations of a 915,000-unit rate.
Starts for single-family units, which comprised about two thirds of the total, edged up 0.5 percent to their highest level since June 2008.
Permits for future home construction rose to a 946,000-unit rate, also the quickest since June 2008.
The housing market has regained some footing after a historic collapse that helped push the economy into a deep recession.
Home building added to national economic growth last year for the first time since 2005 and Tuesday's data reinforces the view that it will provide stronger support this year. That could help counter the drag expected from tighter fiscal policy as Washington works to shrink the federal budget deficit.
"Home building continues to recover and add to the recovery," said Gus Faucher, an economist at PNC Financial Services in Pittsburgh. "The rise in permits suggest we will have a solid spring."
The housing data was just the latest to suggest the economy has built a fair bit of momentum in the first quarter. Nevertheless, the Federal Reserve at a meeting on Tuesday and Wednesday is expected to push forward with plans to buy $85 billion in bonds per month until its sees a substantial improvement in the labor market outlook.
Data for U.S. housing starts can be volatile and is sometimes subject to large revisions. The government revised upward its estimate for January housing starts to a 910,000-unit rate.
The housing market remains a shadow of its former self, with starts at less than half of their pre-recession peak and near levels seen in the early 1990s.
The recovery also has been bumpy. In March, homebuilder sentiment slipped to the lowest level in five months as supply chain concerns and rising costs dented enthusiasm, according to data released on Monday.
Stock index futures were little changed following the data amid caution ahead of a crucial vote in Cyprus that could lead the country into default. Investors are waiting to see if the nation's troubles would have a wider impact in the euro zone.