U.S. Housing Starts Pull Back After Reaching 13-Year High
February 19 2020 - 4:39AM
RTTF2
A report released by the Commerce Department on Wednesday showed
a pullback in new residential construction in the U.S. in the month
of January.
The Commerce Department said housing starts slumped by 3.6
percent to an annual rate of 1.567 million in January after soaring
by 17.7 percent to a revised rate of 1.626 million in December.
Economists had expected housing starts to tumble by 11.4 percent
to a rate of 1.425 million from the 1.608 million originally
reported for the previous month.
With the decrease, housing starts pulled back after reaching
their highest level since hitting 1.649 million in December of
2006.
Single-family housing starts plunged by 5.9 percent to a rate of
1.010 million in January, which more than offset a 0.7 percent
increase in multi-family starts to rate of 557,000.
Meanwhile, the report said building permits spiked by 9.2
percent to an annual rate of 1.551 million in January after sliding
by 3.7 percent to a revised rate of 1.420 million in December.
Building permits, an indicator of future housing demand, had
been expected to rise by 2.4 percent to a rate of 1.450 million
from the 1.416 million originally reported for the previous
month.
With the much bigger than expected increase, building permits
reached their highest level since hitting 1.596 million in March of
2007.
Single-family authorizations shot up by 6.4 percent to a rate of
987,000 in January, and multi-family permits soared by 14.6 percent
to a rate of 564,000.
Compared to the same month a year ago, housing starts in
November were up by 21.4 percent, while building permits were up by
17.9 percent.
"Housing starts in January reversed only a small part of their
weather-induced December surge, and the underlying data point to
solid momentum going forward," said a note from economists at
Oxford Economics.
The noted added, "Housing is expected to make a small positive
contribution to GDP growth in Q1, which is currently tracking at
only 0.4% annualized."
On Tuesday, the National Association of Home Builders released a
separate report showing a slight deterioration in homebuilder
confidence in the month of February.
The report said the NAHB/Wells Fargo Housing Market Index edged
down to 74 in February after slipping to 75 in January. Economists
had expected the index to come in unchanged.
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