WASHINGTON (MarketWatch) — Construction on new houses rose in February to a five-month high, led by the biggest increase in single-family units in nine years. Housing starts climbed 5.2% last month to an annual pace of 1.18 million, the Commerce Department said Wednesday. Economists polled by MarketWatch had expected starts to rise at a seasonally adjusted 1.15 million rate. The faster pace of construction signals that housing will remain one of the best-performing segments of the U.S. economy and help underpin growth in 2016. A surge in new hiring over the past several years has created an expanding pool of potential homeowners who can benefit from ultra-low interest rates. The pickup in construction last month was centered on single-family homes. Single-family starts jumped 7.2% to an annual rate of 822,000. That’s the highest level since November 2007, one month before the Great Recession started. Builders were especially busy in the West, where starts hit a nine-year peak. New construction in the Midwest reached the highest level in 1½ years. Little letup is likely, either. Permits for new construction, a sign of future demand, rose 3.2% to an annual rate of 1.17 million. Permits are running 6.3% above year-ago levels. Permits for single-family homes, which account for about three-quarters of the housing market, edged up slightly last month and remain near a postrecession high.

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