Housing starts slightly dipped in January, starting out the year on a lower note, according to the release from the U.S. Census Bureau and the Department of Housing and Urban Development.
Privately- owned housing starts decreased 2.6% month-over-month to 1.25 million in January. This is up from December’s revised estimate of 1.28 million. On a yearly basis, this is up 10.5% from the January 2016 rate of 1.13 million.
The news comes after last year posted the best year for housing starts since 2007. “For the year as a whole, housing starts of 1.17 million units were the strongest since 2007 as home builders try to keep up with rising demand,” Nationwide Chief Economist David Berson said about the December housing starts report.
Meanwhile, single-family housing starts in January came in at a rate of 823,000, which this is 1.9% above the revised December figure of 808,000.
However, Ralph McLaughlin, Trulia chief economist, said that these numbers are not statistically significant. “We can’t be sure whether the actual number of starts in January was up, down, or flat,” he said.
Instead, McLaughlin pointed to the uptick in building permits.
Privately-owned housing units authorized by building permits in January came in at a seasonally adjusted annual rate of 1,285,000, which is 4.6% above the revised December rate of 1,228,000 and 8.2% above the January 2016 rate of 1,188,000.
McLaughlin explained that the increases shows homebuilders indeed hit the ground running in 2017.
“The big uptick in permits should be good news for inventory-constrained homebuyers, as permits eventually become starts, which in turn become new homes for sale. As a result, we shouldn’t be surprised to see a strong uptick in starts in mid-2017,” he said.