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Economy in Brief

U.S. Housing Starts Decline in January
by Tom Moeller  February 18, 2021

• Total starts back away from 2006 high.

• Single-family housing starts are notably weak.

• Building permits increase for third straight month.

Strength in home building waned last month. Housing starts declined 6.0% (-2.3% y/y) during January to 1.580 million (AR) from 1.680 million in December, revised from 1.669 million. November starts were revised to 1.553 million from 1.578 million. The Action Economics Forecast Survey expected 1.658 million starts in January.

Starts of single-family homes declined 12.2% (+17.5% y/y) to 1.162 million from 1.323 million in December, revised from 1.338 million. Offsetting this decline was a 17.1% increase (-33.4% y/y) in multi-family starts to 418,000 from 357,000 in December, revised from 331,000. It was the highest level of multi-family starts in six months.

A 10.4% January increase (22.5% y/y) in building permits to 1.881 million suggests that weakness in housing starts overall will not be long-lived. The January level of permits was the highest since May 2006, increasing from December's 1.704 million. Permits to build single-family homes rose 3.8% (29.9% y/y) to 1.269 million following a 7.6% December gain. Permits to build multi-family homes surged 27.2% (9.5% y/y) to 612,000 from a little-revised 481,000 in December.

By region, housing starts in the Northeast rose 2.3% (-38.2% y/y) to 134,000, the highest level in three months. This increase was offset by declines everywhere else in the country. In the West, starts declined 11.4% (-9.2% y/y) to 396,000, the lowest level in three months. In the South, starts weakened 2.5% (+4.7% y/y) to 829,000 following December's 5.6% increase. Housing starts in the Midwest weakened 12.3% (+28.5% y/y) to 221,000 following a one-third m/m jump during December.

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 are available here.

Housing Starts (000s, SAAR) Jan Dec Nov Jan Y/Y % 2020 2019 2018
Total 1,580 1,680 1,553 -2.3 1,396 1,295 1,248
  Single-Family 1,162 1,323 1,181 17.5 1,000 893 872
  Multi-Family 418 357 372 -33.4 396 403 376
Starts By Region
  Northeast 134 131 143 -38.2 113 115 111
  Midwest 221 252 189 28.5 194 170 170
  South 829 850 805 4.7 741 689 630
  West 396 447 416 -9.2 348 322 337
Building Permits 1,881 1,704 1,635 22.5 1,438 1,386 1,329
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