Housing Starts Rebound in January as Mortgage Rates Go Down
Single-family starts surged 25.1% to 926,000 units, while the multi-family sector increased 2.4% to 304,000.
Total housing starts rose 18.6% in January 2019 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% to 926,000 units. Meanwhile, the multi-family sector, which includes apartment buildings and condos, increased 2.4% 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.
According to Robert Dietz, the NAHB’s chief economist, “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.”
Regionally, combined single-family and multi-family starts in January rose 58.5% in the Northeast, 29.3% in the West and 13.8% in the South. Starts fell 5.7% in the Midwest.
Overall permits, which are often a harbinger of future housing production, rose 1.4% to 1.35 million units in January. Single-family permits fell 2.1% to 812,000, the lowest level since August 2017. Multi-family permits increased 7.2% to 533,000.
Looking at regional permit data, permits rose 33.1% in the Midwest and 26.4% in the Northeast. Permits fell 8.9% in the West and 3.5% in the South.
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