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U.S. housing starts rebound in January

Total housing starts rose 18.6 per cent in January to a seasonally adjusted annual rate of 1.23 million units from a downwardly revised reading in December, according to a report from the U.S. Housing and Urban Development and Commerce Department that was delayed due to the partial government shutdown.

The January reading of 1.23 million is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts surged 25.1 per cent to 926,000 units. Meanwhile, the multifamily sector, which includes apartment buildings and condos, increased 2.4 per cent to 304,000.

“The bounce back in single-family starts mirrors our builder confidence surveys, as sentiment fell in the latter part of 2018 but rebounded in January after mortgage rates showed a notable decline,” said Greg Ugalde, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Torrington, Conn.

“Some single-family projects that were on pause in December, meaning they were authorized but not started, went online in January. However, builders remain cautious as single-family permit numbers in January were somewhat soft,” said NAHB Chief Economist Robert Dietz.

Regionally, combined single-family and multifamily starts in January rose 58.5 per cent in the Northeast, 29.3 per cent in the West and 13.8 per cent in the South. Starts fell 5.7 per cent in the Midwest.

Overall permits, which are often a harbinger of future housing production, rose 1.4 per cent to 1.35 million units in January. Single-family permits fell 2.1 per cent to 812,000, the lowest level since August 2017. Multifamily permits increased 7.2 per cent to 533,000.

Looking at regional permit data, permits rose 33.1 per cent in the Midwest and 26.4 per cent in the Northeast. Permits fell 8.9 per cent in the West and 3.5 per cent in the South.