D.R. Horton, Inc. (DHI)

[PennyP1cker]

By Lucia Mutikani

WASHINGTON, Feb 16 (Reuters) - U.S. homebuilding rose to more than a one-year high in January, boosted by strong increases in the construction of both single- and multi-family housing units, and further gains are likely with building permits surging to their highest level since 2007.

Other data on Friday showed a jump in import prices last month amid solid increases in the costs of petroleum and a range of other goods, bolstering expectations that inflation will accelerate this year. The bullish housing data suggested the economy remained on firmer footing at the start of the year despite weak retail sales and industrial production in January.

"The economy is back on a winning path for stronger growth even if it is not firing on all cylinders with all sectors participating," said Chris Rupkey, chief economist at MUFG in New York.

Housing starts jumped 9.7 percent to a seasonally adjusted annual rate of 1.326 million units, the Commerce Department said. That was the highest level since October 2016 and followed an upwardly revised sales pace of 1.209 million units.

Economists polled by Reuters had forecast housing starts rising to a pace of 1.234 million units last month after a previously reported rate of 1.192 million units.

Building permits surged 7.4 percent to a rate of 1.396 million units in January, the highest level since June 2007.

A tightening labor market is boosting demand for housing, but rising mortgage rates and house prices could slow the momentum. Despite the unemployment rate being at a 17-year low of 4.1 percent, annual wage growth has not exceeded 3 percent.

STRONG BUY!