Housing Production Shows Solid Start to 2020
February 20, 2020
Total housing starts decreased 3.6 percent in January from an upwardly revised December reading to a seasonally adjusted annual rate of 1.57 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. Meanwhile, overall permits surged to a 13-year high.
The January reading of 1.57 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts decreased 5.9 percent. The multifamily sector, which includes apartment buildings and condos, increased 0.7 percent.
"The housing recovery continues, as single-family housing starts have surpassed 1 million for the second consecutive month and multifamily production has been running above 500,000 for the same period," says Dean Mon, chairman of the National Association of Home Builders. "Meanwhile, builder confidence remains solid as demand continues to pick up."
"While the solid pace for residential construction continues, favorable weather conditions may have accelerated production in the winter months," says Danushka Nanayakkara-Skillington, NAHB's assistant vice president of forecasting and analysis. "At the same time, the growth in permits is a harbinger that the market will continue to move forward in the coming months even as builders grapple with supply-side issues like excessive regulations, labor shortages and rising material costs."
Overall permits increased 9.2 percent in January, the highest level since March 2007. Single-family permits increased 6.4 percent while multifamily permits increased 14.6 percent.