Housing starts fell 16% to a seasonally adjusted annual rate of 880,000 units in January, due mainly to unusually harsh winter weather across much of the U.S., according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
What's more, single-family permits, which are often a harbinger of future building activity, declined 1.3% in January to a seasonally adjusted annual pace of 602,000 units.
‘Cold weather clearly put a chill on new home construction last month, and this is also reflected in our latest builder confidence survey,’ says Kevin Kelly, chairman of the North American Home Builders Association (NAHB), in a release. ‘Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor.’
‘Though the decline in starts is largely weather-related, it is worth noting that on the upside, housing production for the fourth quarter was above 1 million for the first time since 2008 while single-family permits held relatively steady,’ adds David Crowe, chief economist for the NAHB. ‘The less weather sensitive permits data suggests that our forecast for solid growth in single-family housing production in 2014 remains on track, as pent-up housing demand is unleashed.’
Single-family housing starts posted a 15.9% decline in January to reach an annualized rate of 573,000 units. Meanwhile, starts of multifamily projects dropped 16.3% to reach an annualized rate of 307,000 units.
Single-family starts fell the most in the Midwest, where they dropped 60.3%, on an adjusted basis. They also fell 13.8% in the South.
Single-family starts were up 10.7% in the West and were up 2% in the Northeast in January.
Overall permit activity fell 5.4% to 937,000 units in January, due primarily to a pullback in buildings with five units or more, where permits fell 13% to 309,000 units.
Regionally, overall permit issuance was down 10.3% in the Northeast and 26% in the West, but rose 8.6% in the Midwest and 3.4% in the South.
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