Single-Family Starts Remain Soft in January

Market Downturn in Single-Family Construction

Elevated construction costs and constrained affordability conditions led to a reduction in single-family housing starts in January. However, led by solid multifamily production, overall housing starts increased 7.2% in January to a seasonally adjusted annual rate of 1.49 million units, according to a report from HUD and the Census Bureau.

Overall Housing Metrics

The January reading of 1.49 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 2.8% to a 935,000 seasonally adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 30% to an annualized 552,000 pace.

Regional Permit Trends

Looking at regional permit data compared to the previous month, permits were 9.6% lower in the Northeast, 9% higher in the Midwest, 3.5% lower in the South and 15.7% lower in the West.

Multifamily starts were 47.4% higher in the Northeast, 10.8% lower in the Midwest, 11.4% higher in the South and 7.5% lower in the West.

Permit Activity

Overall permits decreased 5.4% to a 1.38 million unit annualized rate in January. Single-family permits decreased 0.9% to an 873,000-unit rate, which is the weakest reading since August of last year. Multifamily permits decreased 12% to an annualized 503,000 pace.

Single-Family Housing Under Construction

The number of single-family homes under construction fell back to 582,000 in January, down 8.8% year over year as the single-family home building market has slowed.

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