The US Census Bureau and Department of Housing and Urban Development housing construction report for January contains mixed but mostly positive results. Housing permits continued their steady increase to a new high not seen since mid-2008. Total permit activity was up 1.8% and the rise was evenly spread across single-family, up 1.9% and multifamily, up 1.5%.
Total housing starts were down 8.5% but the loss was all in multifamily construction where the annualized rate of construction dropped from an unusually high 365,000 in December to a more steady 277,000 in January. The downward adjustment in multifamily was expected since the December figure was out of line with the trend running at 250,000 annualized rate. Single-family starts were virtually unchanged at 613,000 an annualized rate, up 0.8% from December.
Regional results were also mixed and generally more positive when the more reliable permit data are viewed. The South and West saw increases in starts of 4.1% and 16.7% respectively, the highest since spring 2008, and both single-family and multifamily improved. The Northeast and Midwest fell 35.3% and 50% respectively but most of that decline was in multifamily. Regional permit trends were more even with three regions advancing that only the West down 0.5%.
Except for the realignment in rental apartment building, the January report conforms to NAHB expectations for continued modest improvement in housing construction. Single-family permits are at their highest level since June 2008 and the incline has been mostly steady since early 2011. Permits activity has risen by 200,000 since that trough, although total permit activity still remains below half of a normal year’s output. NAHB expects to see continued modest improvement throughout 2013 ending the year at an average total starts rate of 979,000.