U.S. housing starts fell 1.1% to 698,000 units in February, in line with the 697.000 units expected by consensus though stronger than our 690,000 reading. However, it comes after January starts were upwardly revised from a 699,000 pace to a three-year high of 706,000 units started. Building permits also jumped 5.1% to a 717,000 unit rate in February from a 682,000 unit pace in January (was 676,000), suggesting that building strength will continue. The overall strength in housing starts came from the 28.7% jump in multifamily starts. In contrast, single-family starts dropped 9.9% over January. On a year-over-year basis, multifamily starts are up 108%, while single-family starts are up 17.8% over last February. While warm weather has helped give oveall starts a boost, multi-family construction continues to get extra support from strong rental demand. The better than expected February report will likely provide support to markets today after the initial reaction to the large percentage headline drop.