US housing starts fall in notably cold, snowy January

Housing starts fell 3.8% to a seasonally adjusted annual rate of 1.1 million, the Commerce Department said Wednesday. Part of the decline in starts could be attributed to the snowstorms, which blanketed the Northeast last month.

According to the Census Bureau, single-family housing completions in January were at a rate of 693,000; this is 1.4 percent (±10.2 percent) below the revised December rate of 703,000. But that momentum appears to have slowed slightly: Housing starts were just 1.8% higher for January over a year ago.

Demand for housing has been strong over the past year, with starts up 10.8% in 2015 over 2014. Builders were less optimistic about current sales.

In his semi-annual testimony to Congress on the state of the economy last week, the president of the Federal Reserve (Fed), Janet Yellen, was nevertheless upbeat on prospects for the housing market, saying the number of new construction was still below requirements implied by the rate of population increase.

Economic growth estimates for the first quarter are now around a 2 percent rate.

The January figures for single-family housing starts which make the largest chunk of the market, declined by 3.9% to 731,000 homes from the revised December 2016 figure of 761,000 homes. Home construction in the South fell 2.9%, while construction in the West remained relatively unchanged. Single-family permits fell 1.6% to 732,000.

Another report Wednesday showed wholesale prices unexpectedly rose 0.1 percent in January from the prior month as higher food costs more than offset the plunge in energy.

Housing starts for the volatile multifamily segment dropped 3.7 percent to a 368,000-unit pace.

Building permits that echo upcoming construction projects, fell by 0.2% MoM to 1.204 million homes however, this represents 13.5% more housing starts than the previous year’s total of 1.059 million homes.

There were also increases in prices related to securities brokerage and dealing, loan services, apparel, footwear and accessories retailing, as well as fuels and lubricants retailing.