Early, U.S. home building permits fall in Feb

WASHINGTON (Reuters) - The beginning to build new U.S. homes fell in February as winter storms in parts of the country disrupted the activity, whereas the fall in import prices anticipate zero inflation pressures.

The Commerce Department reported Tuesday that housing starts fell 5.9 percent to a seasonally adjusted annual rate of 575,000 units, reversing the sharp rise the previous month.

Analysts polled by Reuters had expected to go down to 570,000 units.

The report was released when members of the monetary policy council of the Federal Reserve began their monthly meeting.

It is hoped that the U.S. central bank kept interest rates at near zero percent and commit to keep "exceptionally low" for a "prolonged period" due to high unemployment.

In parallel, the Labor Department reported that import prices fell 0.3 percent in February, given a reduction in the cost of imported oil prices and other petroleum products.

This was the first monthly decline since July, but roughly in line with the 0.2 percent drop that analysts projected.

Wall Street stocks traded steady after economic data, while Treasuries rose slightly longer term and the dollar slipped against the euro and other benchmark currencies.

"The housing starts figure for houses is not so important. It would be a big surprise if the Fed did something today. They are very concerned about the state of the economy because jobs remain and consumers are cautious," said Gary Shilling , chairman of A. Gary Shilling & Co. in New Jersey.

The recovery of the housing market, driven by the government following a slump of three years, is showing signs of wavering, but analysts predict that an improvement in the labor market and overall economy will avoid another collapse in the sector.

Measures ranging from a government tax credit for first-time buyers, purchases of mortgage-backed securities and loan modifications have supported home sales and slowing the fall in prices.

The housing starts January were revised upward to 611,000 units from a previous figure of 591,000. Compared to February last year, housing starts rose 0.2 percent.

Housing starts for single-family homes fell 0.6 percent last month, at an annual rate 499,000 units, after rising 4.4 percent in January.

The beginnings for the volatile multifamily segment declined 30.3 percent to an annual rate of 76,000, growing by 18.5 percent in January.

Confidence among home builders, however, dropped this month on concerns over the lack of funding for new projects and a wave of properties used in problems that have beaten the market. The properties are selling below their overall value and could saturate the market of new housing.

Permits for new construction, which gives a vision for the future activity, dropped 1.6 percent to 612,000 units for the second consecutive month, the Commerce Department said.

(Reporting by Lucia Mutikani)