January Housing Starts Level Off After Multifamily Surge
Housing starts returned to trend, dropping 2.6% to a seasonally adjusted annual rate of 1.246 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Multifamily production fell 10.2% to 423,000 units after an unusually high December 2016 reading, whereas single-family starts ticked up 1.9% to 823,000 units.
“A settling of housing production is in line with what we are hearing from builders — that they are largely optimistic about current market conditions but still face supply-side headwinds and regulatory hurdles,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a homebuilder and developer from Kerrville, Texas.
“Some pull back in housing production is unsurprising after an overly strong multifamily reading last month,” said NAHB Chief Economist Robert Dietz. “As we move forward in 2017, we can expect the multifamily sector to continue to stabilize and single-family production to move forward at a gradual but consistent pace.”
Regionally in January, combined single- and multifamily housing production rose 55.4% in the Northeast and 20% in the South. Starts fell by 17.9% in the Midwest and 41.3% in the West.
Overall permit issuance rose 4.6% in January to 1.285 million units. Single-family permits fell 2.7% to 808,000 units. Meanwhile, multifamily permits increased 19.8% to 477,000 units.
Regionally, permits rose 29.6% in the Northeast, 9.9% in the South and 5.3% in the Midwest. The West registered a decline of 13.2%.