U.S. housing starts rose 2.8% in January from the prior month to a seasonally adjusted annual rate of 591,000, compared to December’s revised annual rate of 575,000, the Commerce Department reported. January’s rate was a strong 21.1% above the pace of January 2009, but remains well below peak activity levels reached in 2005 and 2006.
Single-family housing starts in January rose a modest 1.5% from December’s revised estimate, to an annual rate of 484,000. January’s rate was 36% higher than January of 2009. Multifamily-housing starts in January rose 18% from December, to an annual rate of 100,000, but were 15% below the annual rate for January 2009.
Applications for building permits, a gauge of future homebuilding activity, declined 4.9% to an annual rate of 621,000. The retreat followed two months of sharp increases.
Regionally, housing starts in January rose 10% in the Northeast, 1% in the South, and 9% in the West compared to December, while starts declined 3% in the Midwest. But housing starts rose sharply in all regions except the West compared to January 2009—by 74% in the Northeast, 57% in the Midwest, and 23% in the South. Housing starts in the West declined 12% in January compared to 2009.
While the housing segment has gained strength in recent months, the industry’s recovery could take a hit if the government’s tax-credit program for home buyers is not extended past its scheduled expiration at the end of April.