Single-Family Housing Starts Up 25.1 Percent
March 8, 2019
Single-family housing starts in January were at a rate of 926,000, according to new data from the U.S. Census Bureau and the Department of Housing and Urban Development. This is 25.1 percent above the revised December figure of 740,000. Privately-owned housing starts in January were at a seasonally-adjusted annual rate of 1,230,000, an 18.6 percent increase from the revised December estimate of 1,037,000 but a 7.8 percent drop from below the January 2018 rate of 1,334,000.
Single-family authorizations in January were at a rate of 812,000, down 2.1 percent from the revised December figure of 829,000. Privately-owned housing units authorized by building permits in January were at a seasonally-adjusted annual rate of 1,345,000, up 1.4 percent from the revised December rate of 1,326,000 but down 1.5 percent from the January 2018 rate of 1,366,000.
Single-family housing completions in January were at a rate of 914,000, a 30.2 percent increase from the revised December rate of 702,000. Privately-owned housing completions in January were at a seasonally-adjusted annual rate of 1,244,000, up 27.6 percent from the revised December estimate of 975,000 and 2.1 percent higher than above the January 2018 rate of 1,218,000.
Industry reaction to today’s data was mixed.
“The data on new housing starts has been particularly volatile over the past few months, driven by large swings in multifamily starts,” said Mike Fratantoni, Senior Vice President and Chief Economist at the Mortgage Bankers Association. “Focusing on the single-family data, the 4.5 percent year-over-year gain is a promising sign for the housing market. Given the underlying strength in overall housing demand, slow and steady growth in new supply will support a modest increase in sales.”
Mark Fleming, Chief Economist of First American Financial Corporation, said, “In January, the 18.6 percent monthly increase in housing starts reflects rising consumer sentiment and builder confidence. Despite the headwinds, home builders are pushing through new construction projects. The 2.1 percent annual increase in completions signals immediate relief from the housing shortage and sends an optimistic message about the housing market. We estimate that over one million new households were created in 2018, adding to the demand for housing. Yet, according to January 2019 year-over-year data, only 862,000 new housing units were completed–the net number of units completed when accounting for single-family dwellings, apartments, manufactured homes and obsolescence. This leaves a shortage of over 680,000 housing units today. January’s year-over-year growth in completions will help bridge this gap between supply and demand.”
“Housing starts, like many other housing indicators, finished 2018 on a low note but today's January 2019 housing starts data shows that total starts increased 18.6 percent from December, although they remain 7.8 percent below the level of starts in January 2018,” said Danielle Hale, Chief Economist for Realtor.com. “Single-family starts were a strong note in today’s report, increasing 25.1 percent in January and registering 4.5 percent higher than one year ago. A spike in mortgage rates in early November undermined buyer purchasing power and caused a dip in builder confidence and weaker construction at the end of 2018. Since then, however, lower mortgage rates have contributed to improving builder confidence and higher pending home sales that could help drive further building production.”
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