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Housing Starts Date: February 16, 2006Time: 04:00 PM - 05:00 PM Station: CNBC Program Closing Bell MARIA BARTIROMO, anchor: Despite another sign of a slowdown in housing, construction of new homes shot up to a 33-year high last month. Housing starts surged 14 1/2 percent for the month. That was the biggest percentage move in 12 years. CNBC's Diana Olick is in Arlington, Virginia with a Realty Check on that. Diana. DIANA OLICK REPORTING: Well, Maria, today is a perfect example of what's going on in the homebuilder's market: higher than normal temperatures. They are keeping the home builders from getting hammered in a slowing market. Higher than average temperatures gave way to higher than expected housing starts. A 14 1/2 percent surge in starts in January. Unidentified Woman (UBS): What the builders have done in January, because the weather was so warm, was to start a 30-year record number of homes, which is smart. You saw in particular a big jump in the Northeast and in the Midwest where typically it would be colder. It would be too cold to build, but they were able to do so. OLICK: And it's not just a one month thing. Total permits were also up 6.8 percent. Permits, of course, are an indicator for the future. That is still lower than the starts number and shows home builder confidence is still easing quite a bit, 18 percent this year over last, according to the Home Builders Association survey. Still, January saw a surge. Even the mortgage guys heard it from their customers. Mr. BOB MOULTON (Americana Mortgage Group): January's interest rates were a quarter percent lower than December. You have homeowners that are concerned about energy prices. With the warm winter, they're not going to feel the impact that they should have felt with the higher oil prices. OLICK: Home builder stocks heated up on the news today, and analysts say they are looking more and more attractive, again despite a slowdown in the market. Unidentified Woman: We do think they've bottomed out despite a lot of negative and kind of mixed data points. The last couple of weeks the stock's starting to pick up. We're seeing a lot of new valued money coming in. We're getting calls from newer investors and also a lot of buyback clients, which is important. The average home builder plans to buy in at 9 percent of their shares this year. So that in itself is putting a floor in the stocks. OLICK: The analysts are all abuzz about investment guru Bill Miller over at Legg Mason because this week Legg Mason increased its holdings in home builders Centex, Pulte, Ryland, and Beazer Homes. Now I have to give you a little bit of clout in all this good news. And that is that foreclosures were up in December, typically a big month for foreclosures, but they were actually higher than in years past so we got to watch that going into January and February. Maria.
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