Housing starts continued their decrease for the fifth straight month in January, while building permits and completed construction saw slight increases, according to the latest new residential construction data from the U.S. Census Bureau.
Housing starts in January were at a seasonally adjusted annual rate of 1,309,000, 4.5% below the December rate of 1,371,000 and 21.4% below last year’s rate of 1,666,000. Single‐family housing starts also saw a 4.3% decrease, from 879,000 in December to 841,000. In addition, multifamily starts decreased by 4.9% to 468,000. The rate for units in buildings with five units or more was 457,000.
On a regional basis, single-family and multifamily starts were 42.2% lower in the Northeast, 25.9% lower in the Midwest, 7.3% higher in the South and 5.5% higher in the West.
“Housing construction weakened in January as ongoing affordability conditions fueled by high mortgage rates and building material costs challenged the market,” commented Alicia Huey, chairman of the National Association of Home Builders (NAHB). “And while a recent two-month upturn in builder sentiment indicates a turning point for single-family construction could take hold in the months ahead, policymakers need to fix the supply chain for building materials to ensure builders can add the additional inventory the housing market desperately needs.”
Building permits in January were at a seasonally adjusted annual rate of 1,339,000, 0.1% above December’s rate of 1,337,000, but 27.3% below last year’s rate of 1,841,000. Single-family permits saw a larger decrease of 1.8%, from 731,000 in December to 718,000. Meanwhile, multifamily permits increased 2.5% to a rate of 621,000. The rate for units in buildings with five units or more was 563,000.
Regionally, permits were 7.8% lower in the Northeast, 1.7% higher in the Midwest, 3% higher in the South and 4.6% lower in the West.
Completed construction was at a seasonally adjusted annual rate of 1,406,000, 1% above the December rate of 1,392,000 and 12.8% above last year’s rate of 1,247,000. Single-family completed construction also increased by 4.4%, from 996,000 in December to 1,040,000. The rate for units in buildings with five units or more was 349,000.
“As completions continue to outpace construction starts, this marks the eighth straight monthly decline for the number of single-family homes under construction, which has fallen to 752,000,” commented Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis. “Meanwhile, the number of apartments under construction stands at the highest level since November 1973, which means a slowdown for apartment starts is approaching.”
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