January housing starts picked up where they left off at the end of 2019, continuing the trend of results not seen since late 2006.
January starts came in at 1,567,000, 10% above the consensus number of 1,425,000, while December’s strong results were revised upward further, from 1,608,000 to 1,626,000. The January figure is 21% higher than January of last year, which came in at 1,291,000.
Single family starts exceeded one million for the second straight month, at 1,010,000, while December’s number was revised upward from 1,055,000 to 1,073,000.
While December starts blew away expectations, some within the industry took pause at the relatively lower level of permits (1,420,000) and expected a bit of a slowdown in January, which clearly did not happen. Further, January permits rebounded from December’s slight dip to post the highest number of permits since March of 2007, with 1,551,000. This is 9.2% higher than the revised December number of 1,420,000, and 17.9% higher than last year’s 1,316,000.
With interest rates at multi-year lows and the inventory of existing homes at historically low levels, demand for new housing should continue to be robust in the coming months as we enter the builders’ spring selling season.