Housing starts jumped 4.7 percent in January to a seasonally adjusted annual rate of 2.159 million units, the highest pace in 21 years, the U.S. Commerce Department reported. January’s housing starts also were 11.6 percent above the pace of a year ago.
The pace of single-family home construction reached an all-time high of 1.76 million units. This was 2.7 percent above the December rate and 12.5 percent above January 2004.
“Builders are striving to keep up with demand, and with mortgage rates and other market conditions still very favorable, they see strong months ahead,” said Dave Wilson, president of the National Association of Home Builders (NAHB) and a custom home builder from Ketchum, Idaho.
“There’s no question that this is a demand-driven housing market right now and that builders are reacting to it,” said NAHB Chief Economist David Seiders. “The single-family market, in particular, is crying out for supply, and increases in house prices are symptomatic of a market that’s being buoyed by demand while constrained by land-use controls in many areas.”
Multifamily housing starts increased to a seasonally adjusted rate of 399,000 units in January, 14 percent above the December pace and 8.1 percent above a year earlier.
Construction of new homes and apartments increased in the South by 18.8 percent and in the West by 1.9 percent for the month but declined in the Northeast and Midwest, regions that were slammed by winter storms. Construction in the Midwest fell by 12.5 percent and in the Northeast by 23.9 percent in January.
Issuance of total building permits increased 1.7 percent from the upwardly revised December pace to a seasonably adjusted rate of 2.105 million units. Single-family permit issuance increased 0.7 percent to a rate of 1.624 million units, the second-highest pace on record.