Housing starts held near their 17 year lows in January, rising +.8% MoM, while building permits continued to fall -3% MoM. Both results were in line with expectations as the inventory overhang in new and existing homes persists, and rising foreclosures continue to add to the glut of homes on the market. Housing starts have fallen by over 20% in the past few months, so a pause is reasonable. But, it is too early to declare stabilization.
Single-family construction continues to see the brunt of the weakness. Single-family starts fell -5.2% MoM (-34% YoY), and permits fell -4.1% MoM (-40% YoY). As expected, multi-family construction rebounded in January after the unusually weak activity in December. Multi-family starts rose +22% MoM (-4% YoY) and permits only declined by -.8% MoM (-15% YoY).
Houses under construction continue to decline, falling -2.4% MoM and -15% YoY. Completed housing rose +1.8% MoM, but is down -26% YoY.
For all of 2007, construction began on 1.355 million homes, the lowest number since 1993, and a 25% decline from 2006. Housing starts peaked in January 2006 at 2.29 million - a thirty year high. New home starts are expected to continue falling through most of this year as new home sales are down almost 60% from their peak in July 2005.
Regionally, starts rose +19% MoM the Northeast and +12% MoM in the Midwest in January, while they fell -3% MoM in the South and -6% MoM in the West. In fact single-family new home starts in the West were the lowest last month since records began in 1959!
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