New residential construction in the U.S. pulled back sharply in February after jumping in the previous month, according to a report released by the Commerce Department on Tuesday.
The report said housing starts plunged by 8.7 percent to an annual rate of 1.162 million in February after surging up by 11.7 percent to a revised rate of 1.273 million in January.
Economists had expected housing starts to dip to a rate of 1.213 million from the 1.230 million originally reported for the previous month.
The Commerce Department said building permits also fell by 1.6 percent to an annual rate of 1.296 million in February after dipping by 0.7 percent to a revised rate of 1.1317 million in January.
Building permits, an indicator of future housing demand, has been expected to drop to 1.300 million from the 1.345 million originally reported for the previous month.