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Economy in Brief

U.S. Housing Starts Give Back Some of December Gains in January
by Sandy Batten  February 19, 2020

Housing starts fell 3.6% m/m (+21.4% y/y) in January to 1.567 million units at an annual rate, giving back some of the outsized weather-aided 17.7% m/m jump in December (1.626 million units), which was revised up from a 16.9% m/m gain (1.608 million units). Still, the decline was smaller than had been anticipated by the Action Economics Forecast Survey, which looked for a decline in January to 1.420 million units.

The January retreat in total starts was due completely to weaker single-family starts, which fell 5.9% m/m (+4.6% y/y) to 1.010 million units. Multi-family starts in January added to their marked 25.4% m/m December surge by edging up 0.7% m/m (+71.4% y/y) to 557,000 units. Multi-family starts are now at their highest level since December 1986. Residential investment in the national accounts rose in both Q3 and Q4; January housing starts point to a robust 2020 Q1 as starts in January were 8.1% above the Q4 average.

Building permits were stronger than expected in January, rising 9.2% m/m (17.9% y/y) to 1.551 million units after having fallen 3.7% m/m in December. The January reading was the highest since March 2007. The issuance of permits is not nearly as affected by weather as are starts. Permits to build single-family homes rose 6.4% m/m (20.2% y/y) to 987,000 while multi-family permits jumped 14.6% m/m (13.9% y/y) to 564,000.

By region, housing starts jumped up 31.9% m/m to 178,000 units in the Northeast and edged up 1.2% m/m to 431,000 in the West. In contrast, starts slumped 25.9% m/m to 180,000 in the Midwest and fell 5.4% m/m to 778,000 in the South.

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

The minutes to the latest FOMC meeting can be found here.

Housing Starts (000s, SAAR) Jan Dec Nov Jan Y/Y % 2019 2018 2017
Total 1,567 1,626 1,381 21.4 1,300 1,250 1,209
  Single-Family 1,010 1,073 940 4.6 894 873 852
  Multi-Family 557 553 441 71.4 405 377 357
Starts By Region
  Northeast 178 135 107 23.6 115 111 111
  Midwest 180 243 172 27.7 171 171 181
  South 778 822 748 9.1 691 631 603
  West 431 426 354 47.1 324 337 314
Building Permits 1,551 1,420 1,474 17.9 1,350 1,330 1,286
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