January Housing Starts Dip
The Census Bureau and HUD yesterday reported housing starts fell in January, the second consecutive monthly drop.
The report said privately owned housing starts fell to 1.099 million units in January, a 3.8 percent drop from December’s revised 1.143 million, but was 1.8 percent higher from a year ago (1.080 million). Single-family starts fell by nearly 4 percent to 731,000 from January’s revised 761,000. The January rate for buildings with five units or more fell by 2.5 percent to 354,000 from December’s revised 363,000.
All regions saw decreases. The Northeast saw a 3.7 percent decrease to 156,000 units, seasonally adjusted, from December’s revised 162,000 units but improved by 44.4 percent from a year ago. In the Midwest, starts fell by 12.8 percent to 136,000 units from December’s revised 156,000 and fell by 6.2 percent from a year ago.
In the South, housing starts fell by 2.9 percent to 560,000 units from December’s revised 577,000 but improved by 4.9 percent from a year ago. In the West, starts dipped by 0.4 percent to 247,000 units from December’s revised 248,000 and fell by 15.7 percent from a year ago.
Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said the fall in housing starts occurred despite expectations for a modest gain; in addition, December starts were downwardly revised to a 2.8 percent decrease.
“January is typically the least important month of the year for home building which means that seasonal adjustment distortions can be rather significant,” Vitner said. “Despite January’s slow start, we continue to believe that the housing market will be one of the bright spots for the domestic economy in 2016…expectations that interest rates are likely to remain lower for longer should also support demand.”
HUD/Census reported privately owned housing units authorized by building permits in January fell by 0.2 percent to 1.202 million from December’s revised 1.204 million, but 13.5 percent higher than a year ago (1.059 million). Single-family authorizations fell to 720,000; authorizations of units in buildings with five units or more rose by 1.1 percent to 442,000.
The report said privately owned housing completions rose to a seasonally adjusted annual rate of 1.057 million, a 2.0 percent increase from December’s revised 1.036 million and 8.4 percent higher than a year ago (975,000). Single-family housing completions in January fell by 1.4 percent in January to 693,000; the January rate for units in buildings with five units or more rose by 8.3 percent to 351,000.
Despite consensus expectations for a slight gain, housing starts tumbled 3.8 percent in January to a 1.099 million-unit rate. Weakness was broad based as single- and multifamily starts both fell on the month.
