Housing Starts Off to a Good Start in January

Permit authorizations were at a seasonally adjusted annual rate of 1,396,000, a 7.4 percent rise from both the previous month and January 2016. Building permits for single-family homes declined 2.7 percent, but multi-unit permits jumped by double-digit percentages—37.8 percent for 2-4 units and 25.4 percent for five units or more.

Permit authorizations grew 21.9 percent in the South and 3.5 percent in the West. Permit authorizations fell 16.9 percent in the Northeast and 11.7 percent in the Midwest. Most of the gains were for multi-unit construction.

“The growth in production is in line with our reports of solid builder confidence in the housing market,” said National Association of Home Builders Chairman Randy Noel. “A pro-business regulatory climate and increasing housing demand are boosting builders’ optimism, even as they continue to face supply-side hurdles such as rising construction material prices and access to lots and labor.”

NAHB Chief Economist Robert Dietz noted the “three-month moving average for single-family starts was near a post-recession high rate of construction (890,000).”

“Demand for owner-occupied housing is rising due to favorable demographic tailwinds and a healthy labor market. Increases in after-tax incomes should help prospective buyers save for a downpayment on a home,” said NAHB Chief Economist Robert Dietz. “As consumers continue to enter the single-family market, we should see builders increase production to meet this demand.”