Record January Warmth Heats Up Housing Starts
A temporary sag in interest rates and the nation’s warmest January on record pushed up new home construction for the month by 14.5%, the U.S. Commerce Department reported last Thursday.
The January pace of new-home construction rose to a seasonally adjusted annual rate of 2.276 million units, 4% above the pace of a year earlier and the highest since 1973.
Single-family housing starts rose 12.8% to a record pace of 1.819 million units in January, which was 2.8% higher than January 2005.
“Builders apparently took advantage of the good weather and low interest rates in January to pick up the pace of production after a cold and wet December,” said NAHB President David Pressly.
“The January surge in housing starts was mainly weather-related,” said NAHB Chief Economist David Seiders. “Market fundamentals suggest that this pace of activity will be hard to sustain, and NAHB’s survey of single-family builders points toward some cooling down in coming months, largely because of eroding affordability conditions.”
Multifamily housing starts rose 21.9% in January to a seasonally adjusted 457,000-unit annual rate, up 9.1% over the same month a year earlier. “Our surveys of multifamily builders show that the rental market is firming up to some degree, with declining vacancies and rising rents,” said Seiders.
All four regions reported strong increases in housing starts for the month. Construction of new homes and apartments rose 29.2% in the Northeast, 23.7% in the Midwest, 16.9% in the West and 8.7% in the South.
Issuance of total building permits increased 6.8% to a seasonably adjusted rate of 2.217 million units last month. Single-family permits were up 2.4%, reaching a pace of 1.685 million units, and multifamily permits surged 23.7% to 532,000 units.
Want to Know the Housing Starts Through 2014?
Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.
To learn more, visit www.housingeconomics.com.
Give Your Perspective on the New NAHB Economics Blog
Give your economic perspective on NAHB's new economics blog, “Seiders on Housing,” an informal Internet-based discussion forum dealing with topical economic issues, housing trends, survey research and other topics affecting the housing sector of the economy.
Log onto the blog at http://nahbblog.blogs.com and get direct access to NAHB Chief Economist David Seiders' expert opinions, projections and responses.
Attend the Spring Construction Forecast Conference in April
Plan to attend NAHB's Spring Construction Forecast Conference on April 27 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth look at the economic outlook for the housing industry.
For information or to register, visit www.nahb.org/cfc.