Home building rises to highest level since 2000

? Home builders, aided by low mortgage rates and mild weather, broke ground in January on the largest number of projects in nearly two years, raising hopes that the housing market will help pull the economy out of recession.

Construction of new homes and apartments climbed last month to a seasonally adjusted annual rate of 1.68 million units, a 6.3 percent increase over December’s level, the Commerce Department reported Tuesday.

The bigger-than-expected increase pushed housing construction to its highest level since February 2000 and followed a 2.3 percent decline in December.

Low mortgage rates have helped the housing and construction markets thrive even while the country has suffered through a recession that began in March, analysts said.

Another factor motivating new-home buyers is solid appreciation of housing values, particularly as the stock market has taken a hit from the ailing economy, economists said. Mild weather also played a role in last month’s advance.

“It looks as if housing will help the economy escape the recession,” said economist Joel Naroff, president of Naroff Economic Advisors.

By region, housing construction rose 8.7 percent in the Northeast to a rate of 162,000 in January. In the South, housing construction went up 14.4 percent to a rate of 800,000. But in the West, housing construction fell 3.6 percent to rate of 377,000; in the Midwest, it dipped 0.3 percent to a rate of 339,000.

Building permits, a good barometer of current demand, rose 3.1 percent in January to a rate of 1.71 million units.