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Economy in Brief

U.S. Housing Starts Rebounded in January
by Sandy Batten  March 8, 2019

Total housing starts rebounded markedly in January, surging 18.6% m/m (but still down 7.8% y/y) to 1.230 million units at an annual rate after having collapsed 14.0% m/m in December to a slightly downwardly revised 1.037 million units (initially 1.078 million). The January increase was the largest monthly percentage increase since October 2016. The Action Economics survey had expected a more modest rebound to 1.201 million units. In the release, the Census Bureau noted that data collection and processing had been delayed by the federal government shutdown, which could have impacted the data. However, the Bureau said that it had monitored data quality and no "systematic issues were identified."

An outsize jump in single family starts accounted for most of the January surge in total starts. Single-family starts exploded 25.1% m/m (4.5% y/y) to 926,000 units following an 8.4% m/m drop in December. This was the largest monthly percentage increase since 1979 but only raised single-family starts up to their May 2018 level. Multi-family starts rose a more modest 2.4% (-32.1% y/y) in January to 304,000 units, falling far short of making up for their 25.4% m/m plunge in December.

Starts rose in three of the four major regions in January after having fallen in each major region in December. In January, only the Midwest experienced a decline, a 5.7% m/m fall (-20.0% y/y) to 116,000 units. The third consecutive monthly decline in January pushed Midwest starts down to their lowest level since early 2015. Starts in the Northeast, typically significantly affected by weather at this time of year, surged 58.5% m/m (+28.4% y/y) to 149,000 units. Starts in the South rose 13.8% m/m (+2.3% y/y) to 700,000 units. And starts in the West jumped up 29.3% m/m (-31.9% y/y) to 265,000 units.

By comparison, building permits only rose slightly in January, edging up 1.4% m/m (-1.5% y/y) to 1.345 million units. Gains in multi-family permits more than accounted for the January increase. Multi-family permits rose 7.2% m/m (7.5% y/y) to 533,000 in January from 497,000 in December. Single-family permits fell 2.1% m/m (-6.7% y/y) to 812,000 in January from 829,000 in December.

The housing starts and permits figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.

Housing Starts (000s, SAAR) Jan Dec Nov Jan Y/Y % 2018 2017 2016
Total 1,230 1,037 1,206 -7.8 1,241 1,208 1,177
  Single-Family 926 740 808 4.5 866 852 785
  Multi-Family 304 297 398 -32.1 374 356 393
Starts By Region
  Northeast 149 94 110 28.4 110 111 116
  Midwest 116 123 144 -20.0 170 180 185
  South 700 615 666 2.3 630 603 585
  West 265 205 286 -31.9 335 314 292
Building Permits 1,345 1,326 1,322 -1.5 1,313 1,286 1,206
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