Starts of new homes bounced back in January with a 18.6% rise to 1.230 million units (SAAR) after 1.037 million units in December. Even better, the gain was concentrated in single-family units which rose 25.1% to 926,000, its highest since 938,000 in May 2018. Multi-unit starts had a modest increase of 2.4% to 304,000 in January. Nonetheless, starts were down 7.8% from January 2018 when mild weather allowed more outdoor construction.
Starts were uneven across regions with the Northeast seeing a burst of new activity (+58.5%), the West starting to recover from the wildfires (+29.3%), the South getting ready for the spring buying season (+13.8%), but the Midwest hampered by severe cold weather (-5.7%).
Permits-issued remained about on trend with a mild 1.4% increase to 1.345 million units (SAAR) in January, little changed from the prior two months. Permits were off 1.5% from January 2018. Permits were down 2.1% for single-family units in January from December and the lowest since 803,000 in August 2017. It was down 6.7% from the year-ago month. The more volatile multi-unit sector was up 7.2% from the prior month and up 7.5% from January 2018. At present, consumers may be opting for smaller homes as their buy-in to the housing market.
In any case, lower mortgage interest rates probably helped both builders and buyers look more favorably on construction and purchase of new homes.
Disclaimer: Whetstone Analysis provides commentary as a service to its subscribers. Whetstone Analysis is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated and every effort is made to ensure its accuracy, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date. Click here to read our full Disclaimer.