US housing starts fall for fifth straight month in January

The downward trend in US housing starts that defined the second half of 2022 persisted in January, as starts fell for a fifth consecutive month to open the new year.

The US Census Bureau reported January starts at 1.309 million units on a seasonally adjusted annual basis. That’s the lowest level since the pandemic-influenced June 2020 reading of 1.269 million units.

Total starts fell 4.5% from the revised December level, and declined 21.4% year over year. The annual decrease was driven by a plunge in single-family construction, which fell 27.3% from the year-ago pace. Multifamily also softened, falling 8.1%.

On a regional basis, starts in the Northeast and Midwest plunged 42.2% and 25.9%, respectively, from December. The South and West registered modest monthly increases of 7.3% and 5.5%, respectively.

The National Association of Home Builders/Wells Fargo Housing Market Index increased seven points in February, signaling a potential strengthening in single-family construction later this year.

“While the HMI remains below the breakeven level of 50, the increase from 31 to 42 from December to February is a positive sign for the market,” said NAHB chief economist Robert Dietz.

Analysts took note of the still historic level of homes currently under construction. That reading fell just 0.1% month over month, at 1.700 million units (SAAR).

Permits were also resilient in January, edging up 0.1% to 1.339 million units (SAAR) from the December reading. However, the January figure was 27.3% below the year-ago pace.

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