Feb
17

New Housing Starts Post January Jump

February 17, 2011

U.S. new home construction rose to its highest level last month since September, thanks to a huge surge in multifamily housing.

The U.S. Commerce Department released figures Wednesday to show that nationwide housing starts increased 14.6 percent in January to a seasonally adjusted rate of 596,000 units.

new building being builtThe gain was due entirely to an increase in new multifamily housing, a sector that has been seeing declines for months. Multifamily construction starts increased 77.7 percent to 183,000 units in January.

Single-family housing starts for the month of January fell 1.0 percent to 413,000 units.

“Considering the abnormally poor weather conditions that prevailed across most of the country last month, along with the continuing difficulty that builders are having in obtaining financing for new construction, the fact that single-family starts held virtually unchanged while multifamily starts posted solid gains is encouraging,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB).

“Any gain in housing production means more people are being put back to work, and is a sign that builders are preparing for improving demand for new homes in the spring.”

Three out of the four U.S. regions saw increases in housing production for January:

*Midwest: 36.4 percent gain

*Northeast: 41.8 percent gain

*South: 15.8 percent gain

*West: Posted a 9.7 percent decline in overall housing starts

Permits for new homes across the country fell 10.4 percent in January, but December posted an unusually large spike in issued permits due to the fact that building codes were changing at the beginning of the new year.

“As we continue to see from today’s report, month-to-month housing market data can be volatile, and the industry continues to suffer from the affects of the recession,” said U.S. Commerce Secretary Gary Locke.

“But as the president’s 2012 budget makes clear, building a sound economic future that includes a strong housing market requires smart investments that enhance competitiveness, create jobs and drive economic growth – investments that will support the long-term stability of the U.S. economy and help us win the future.”

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