Privately owned housing starts in January decreased 4.5% from the previous month to a seasonally adjusted annual rate of 1,309,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
The January rate was 21.4% below the January 2022 seasonally adjusted annual rate of 1,666,000.
Single-family housing starts in January were at a rate of 841,000, 4.3% below the revised December figure of 879,000. Last month’s rate of units in buildings with five units or more was 457,000.
“Among other factors, housing starts are a function of consumer confidence and builder confidence. We’ve seen consumer confidence improve since the lows of last year, but there are still lingering economic concerns leaving some potential home buyers on the sidelines,” says Zonda chief economist Ali Wolf. “Builder confidence has also improved, but the latest NAHB Housing Market Index shows that overall conditions are still considered poor rather than good. As a result, we continue to see new housing starts activity down as builders better align new production with sales and housing demand.”
Privately owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,339,000, 0.1% above the December rate but 27.3% lower than the January 2022 rate of 1,841,000. Single-family authorizations decreased 1.8% month over month to a seasonally adjusted annual rate of 731,000.
According to Fannie Mae chief economist Doug Duncan, the January rate of single-family authorizations is at its lowest level since 2015, excluding the initial COVID-19 shock. Authorizations of units in buildings with five units or more were at a rate of 563,000 in January.
“Though single-family starts have bounced around a bit in recent months, their trend remains one of general decline,” Duncan says. “Combined with a steady decrease in new permits, this report is largely in line with our expectations for ongoing weakness in new-home starts this year. Fundamentally, builders currently have a large inventory of new homes for sale that have already been completed or are under construction, so we expect builders will focus on completing and selling those previously started homes rather than beginning new projects.”
Privately owned housing completions in January were at a seasonally adjusted annual rate of 1,406,000, 1% above the revised December estimate and 12.8% above the January 2022 rate. Single-family housing completions in January were at a rate of 1,040,000, 4.4% above the revised December rate of 996,000. The January completions rate for units in buildings with five units or more was 349,000.
