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Single-Family Starts Up Nearly
Two Percent in January

Combined Starts Drop on Weakness in Multifamily


Single-family starts, permits and completions were up in all four major regions of the nation on a month-over-month basis, except for the West, which is noteworthy, according to the National Association of Home Builders.

Total housing starts, at an annual rate of 1,246,000 units, were dragged down by the multifamily sector and dropped 2.6 percent in January versus December, according to the Census Bureau. However, combined starts are 10.5 percent above January 2016.

Single-family housing starts in January were 1.9 percent above December, and 6.2 percent higher compared to January 2016. Multifamily shed 7.9 percent on a monthly basis, but gained 25.7 percent year-over-year.

"Multifamily development was the reason the headline starts number declined in January," said Robert Dietz, chief economist for the National Association of Home Builders. "Monthly volatility for multifamily starts has been a factor in the data since August."

Regionally, single-family starts posted month-over-month gains in all regions except the West (-18.6 percent); the Northeast was +8.6 percent; the Midwest was +6.3 percent; and the South was +9.6 percent.

Single-family permits also posted a decline in the West (-17.2 percent), while the Northeast was +7.3 percent; the Midwest was +1.7 percent; and the South was +1.6 percent.

"These numbers are worth noting, as new homes are typically more expensive in the West, and competitive pricing is a key concern in 2017 as mortgage interest rates increase," Dietz said.

Combined permits in January, at 1,285,000, were 4.6 percent above December, and also increased 8.2 percent over January 2016.

Single-family permits were 2.7 percent below December, but gained 11.1 percent versus January 2016. Multifamily permits jumped 29.6 percent on a monthly basis, and climbed 4.7 percent versus January 2016.

"Permits for multifamily in January also showed strength, consistent with our forecast of the multifamily development market leveling off at elevated levels of production," Dietz said.

Total completions in January, at 1,047,000 units, declined 5.6 percent compared to December, and also decreased 0.9 percent versus January 2016. Single-family completions were 4.3 percent above December, and 15.8 percent higher than January 2016. Multifamily completions declined 26.9 percent for the month, and also dropped 29.9 percent for the year.

Completions were also up month-over-month in all regions, except the West (-18.5 percent). The Northeast was +34.0 percent; the Midwest was +5.1 percent; and the South was +10.2 percent.

The Census Bureau's residential construction report for February will be released March 16.

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July 21, 2019, 1:12 pm PDT

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