- By David M. Kinchen
“Steady demand for new homes is prompting builders to put more construction crews back to work in order to replenish thin supplies of completed product,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “We expect this progress to continue through the spring buying season and beyond, with credit availability and poor appraisals being the primary limiting factors.”
“Today’s report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single- and multifamily units,” said NAHB Chief Economist David Crowe. “Meanwhile, the decline in multifamily starts reflects an adjustment from an unsustainably large gain in December, and is consistent with the up-and-down swings that are often associated with that sector.”
In January, single-family housing starts were virtually unchanged from an improved pace in the previous month, registering a 0.8 percent gain to 613,000 units. This was the strongest pace of single-family housing production since July 2008. Meanwhile, multifamily housing starts, which tend to display significant month-to-month volatility, declined 24.1 percent to 277,000 units.
Regionally, combined single- and multifamily housing production gained 4.1 percent in the South and 16.7 percent in the West, but fell 35.3 percent in the Northeast and 50 percent in the Midwest in January.
Permit issuance, which can be an indicator of future building activity, rose 1.9 percent on the single-family side to a seasonally adjusted, annual pace of 584,000 units and rose 1.5 percent on the multifamily side to a 341,000-unit pace in January. Both were the strongest permit numbers seen since mid-2008.
Permitting activity rose in three out of four regions in January, with a 10.1 percent gain registered in the Northeast, a 1.4 percent gain registered in the Midwest and a 1.1 percent gain registered in the South. The West posted virtually no change in permitting activity, with a 0.5 percent decline.
Privately-owned housing completions in January were at a seasonally adjusted annual rate of 724,000. This is 6.0 percent above the revised December estimate of 683,000 and is 33.6 percent above the January 2012 rate of 542,000.
Single-family housing completions in January were at a rate of 565,000; this is 7.0 percent above the revised December rate of 528,000. The January rate for units in buildings with five units or more was 152,000.