US housing starts fall for fifth straight month in January

North American housing starts continued to fall as we entered the new year

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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