New home starts on private residences inched up slightly to 917,000 units in February, up 0.8% from January, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development.

From last year, new home starts increased 27.7%, compared to 718,000 units in February 2012. 

"Housing starts made a partial comeback in February, but more importantly, housing permits made a sizeable gain," said analysts at Econoday.

Building permits in February reached 946,000 units, 4.6% above the January recording of 904,000 units. According to Econoday, this exceeded market expectations of 925,000 units for February.

February’s permit data also was up 33.8% from February 2012 when 707,000 permits were recorded.

Single-family authorizations in February totaled 600,000, up 2.7% from January’s 584,000. Authorizations of units in buildings with five units or more were at a rate of 316,000 units in February.

Privately-owned housing completions in February reached 711,000, 0.6% below the revised January estimate of 715,000, but still 24.3% above the 572,000 completions recorded in February 2012.

February single-family housing completions rose 3.6% from January to 574,000 units, compared to January’s 554,000 units. Additionally, the February rate for units in buildings with five units or more totaled 130,000.

Analysts at Econoday noted that housing starts are volatile during winter months due to weather and other large seasonal factors.

"Nonetheless, starts are on a modest uptrend, fueled in part by shortage in supply and also slowly rising demand boosted by low mortgage rates. Permits, less affected by weather, are heading up and this is a positive for the economy. The housing numbers should not only nudge up construction employment but also consumer confidence," Econoday said.