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The U.S. housing sector showed unexpected strength in February, with housing starts and building permits both rising against expectations for continued declines.

U.S. housing starts rose to an annualized pace of 583k, representing a month-over-month increase of 22.2%, according to the U.S. Department of Commerce on Tuesday morning.

The consensus was looking for starts to decline to 450k. The previous month's reading was revised up to 477k from a previously reported 466k.

Single-family homes - the most important component in the report, accounting for four-fifths of housing starts - rose 1.1% to 357k, compared to the previous month's 353k. The rise comes following decline in the component in 20 of the past 21 months.

Multiple-family homes rose to 226k, compared to the previous month's 124k level.

Meanwhile, building permits rose to 547k in February, up from 531k in January. The consensus was looking for a decline to 500k building permits.

Single-family permits rose 11% in the month to 373k in February from January's 336k. Multiple-family unit permits fell to 174k, up from 195k units in January.