Housing Market Sends Mixed Signals In January With Varied Construction Activity – NMP Skip to main content

Housing Market Sends Mixed Signals In January With Varied Construction Activity

Feb 16, 2024
home construction
News Director

Building permits rise year-over-year, signaling growth, while a significant decline in housing starts and completions points to ongoing challenges and market volatility.

The pace of housing construction showed mixed signals in January, with building permits showing growth year-over-year, while housing starts experienced a significant decline from December, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

Building permits, a leading indicator of future construction activity, were issued at a seasonally adjusted annual rate of 1,470,000 units in January, marking a slight decrease of 1.5% from December's revised rate of 1,493,000. However, this figure represents an 8.6% increase compared to January 2023, signaling continued interest in new housing development. Specifically, single-family home authorizations rose by 1.6% to a rate of 1,015,000 from December's revised figure of 999,000, while permits for units in buildings with five or more units were at a rate of 405,000.

Conversely, housing starts, which measure the commencement of construction on new housing units, totaled a seasonally adjusted annual rate of 1,331,000 in January. This reflects a sharp 14.8% drop from the revised December estimate of 1,562,000 and a slight 0.7% decrease from the January 2023 rate. The decline was more pronounced in the single-family sector, which saw starts fall by 4.7% to a rate of 1,004,000 compared to December. The rate for units in buildings with five or more units came in at 314,000.

Housing completions in January also saw a downturn, with a seasonally adjusted annual rate of 1,416,000 units, 8.1% below December's revised figure. Despite this month-to-month decrease, completions were up 2.8% from January 2023, indicating that builders are working through backlogs. Single-family home completions plummeted by 16.3% to 857,000 from December, while completions for units in buildings with five or more units were reported at 538,000.

“There is a risk in the short-term that housing market progress stalls as long-term interest rates have risen again in recent weeks, but this should be short-lived, as the expectation for Fed rate cuts remains, which should bring long-term rates down again," First American Deputy Chief Economist Odeta Kushi said. “The outlook for the single-family, new-home market is positive, but challenges remain. Potential home buyers are sensitive to mortgage rate fluctuations, while builders continue to face headwinds, such as higher construction costs and shortages of buildable lots and skilled labor.”

These figures highlight the ongoing challenges and volatility in the housing construction market, influenced by factors such as material and labor shortages, as well as fluctuating demand. While the year-over-year increase in building permits suggests optimism among developers, the drop in housing starts and completions underscores the complexities of translating permits into actual construction and ultimately, into new homes ready for occupancy.

About the author
Christine Stuart is the news director at NMP.
Published
Feb 16, 2024
Mortgage Servicer Satisfaction Rises Despite Borrower Strain

J.D. Power finds better digital service, fee transparency, and issue resolution are strengthening trust while homeowners face mounting financial pressure

Jul 23, 2026
Home Price Growth Accelerates, But Luxury Buyers Skew The Market

Redfin’s index rose 3% annually in June, with luxury demand and limited move-in-ready inventory supporting prices despite elevated mortgage rates

Jul 23, 2026
Lenders Expect More Volume Without Adding More Overhead

TMC survey finds lenders are looking to current sales teams, experienced recruits, and lower production costs to drive second-half growth

Jul 23, 2026
Higher Mortgage Rates Push Pending Home Sales Lower In June

Contract signings fell 5.4% from May as elevated borrowing costs and record home prices continued to pressure affordability, particularly for first-time buyers

Jul 20, 2026
Short Sales Now Recover More Value Than Foreclosures

Realtor.com finds short-sale activity accelerating, though the transactions represented just 0.6% of typical home sales in 2025

Jul 17, 2026
Chrisman: Why Do Mortgage Rates Care About Inflation?

When prices rise, bond values fall — here’s the mechanics behind why inflation drives mortgage rates higher

Jul 15, 2026