Recent housing start data from the National Association of Home Builders (NAHB) looks slightly discouraging, with an 8.5 percent decline, at least if increases in housing starts excite you. But that dip was driven by a double-digit drop in multifamily starts. Single-family starts are actually at their strongest pace since 2008. There was another notable stat in the latest report that is encouraging for the future as well: Issuance of permits for new home construction rose 1.8 percent to 925,000 units — the quickest pace since mid-2008.
“Today’s report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single- and multifamily units,” noted NAHB Chief Economist David Crowe. “Meanwhile, the decline in multifamily starts reflects an adjustment from an unsustainably large gain in December, and is consistent with the up-and-down swings that are often associated with that sector.”
Permit issuance, which can be an indicator of future building activity, rose 1.9 percent on the single-family side to a seasonally adjusted, annual pace of 584,000 units and rose 1.5 percent on the multifamily side to a 341,000-unit pace in January.
The biggest permit beneficiary in January, according to the data, was the Northeast with a 10.1 percent gain. Next came the Midwest at a 1.4 percent gain and a 1.1 percent gain registered in the South. The West posted virtually no change in permitting activity, with a 0.5 percent decline.
Back to the housing starts: The seasonally adjusted annual rate of housing starts in January sits at 890,000 units after the multifamily dip of 24 percent. Single-family housing starts, however, were virtually unchanged from an improved pace in the previous month, registering a 0.8 percent gain to 613,000 units. This was the strongest pace of single-family housing production since July 2008.
Regionally, combined single- and multifamily housing production gained 4.1 percent in the South and 16.7 percent in the West, but fell 35.3 percent in the Northeast and 50 percent in the Midwest in January.