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Housing Starts, Permits Up in January as Completions Drop

Housing starts rose 1.5 percent in January to 699,000, compared with market expectations for a smaller increase to 675,000, according the ""Commerce Department"":http://www.commerce.gov/.

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Housing starts are 9.9 percent above their year ago level but still 69.2 percent below their January 2006 peak.

Single-family housing starts fell 1.0 percent to 508,000. Starts fell month-month in the colder northeast and Midwest but increased in the south and west. Single-family starts are 16.2 percent above levels of a year ago but still 72.1 percent below their January 2006 peak. In the four years since the onset of the recession, single-family starts have average 491,000 per month compared with 1,492,000 per month in the four prior

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years.

Multifamily housing starts increased 8.5 percent to 191,000 and are 4 percent below the level of one year ago. Multifamily starts peaked at a seasonally adjusted annual rate of 1,000,000 in March 1973.

Multifamily starts have become quite volatile over the past year amid a moderately improving trend.

Permits for new homes increased a modest 0.7 percent in January, up just 5,000 to 676,000. In the previous three months the average monthly increase was 27,000 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô including a 9,000 drop in permits in December.

Single-family permits accounted for 4,000 of the increase; two to four family homes dropped 1,000 and multifamily (five or more units) increased by 2,000. Reflecting more of regional economies than weather, permits fell in the Midwest but rose in the other three census regions.

Housing completions ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô which add to inventories ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô fell 12.0 percent in January, the largest month-month percentage decline since July 2010 (34 percent). Single family completions dropped 14.9 percent in January, the largest drop since last March (22.4 percent).

Even with the decline, builders finished 389,000 single family homes than the 307,000 sold in the most recent new home sales report for December.

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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