U.S. Housing Starts Pull Back 2.0% In January, More Than Expected

(RTTNews) - After reporting a substantial rebound in new residential construction in the previous month, the Commerce Department released a report on Wednesday showing that U.S. housing starts pulled back by somewhat more than expected in the month of January.

The report said housing starts tumbled 2.0 percent to an annual rate of 1.065 million in January after jumping 7.1 percent to the revised December estimate of 1.087 million.

Economists had expected housing starts to fall by 1.7 percent to a rate of 1.070 million in January from the 1.089 million originally reported for the previous month.

The bigger than expected decrease in housing starts reflected a steep drop in single-family starts, which plunged by 6.7 percent to 678,000 in January from 727,000 in December.

Meanwhile, the report showed that multi-family starts jumped by 7.5 percent to 387,000 in January from 360,000 in December.

The Commerce Department also said building permits slid 0.7 percent to an annual rate of 1.053 million in January from the upwardly revised December rate of 1.060 million.

Building permits, an indicator of future housing demand, had been expected to climb to 1.069 million from the 1.032 million that had been reported for December.

Single-family permits slumped by 3.1 percent to 654,000 in January from 675,000 in December, while multi-family permits climbed by 3.6 percent to 399,000 from 385,000.

Despite the monthly decreases, the Commerce Department noted that housing starts in January were up by 18.7 percent compared to the same month a year ago. Building permits were also up by 8.1 percent year-over-year.

On Tuesday, the National Association of Home Builders released a separate report showing that the unusually high snow levels across much of the country have contributed to an unexpected deterioration in homebuilder confidence in February

The report said the NAHB/Wells Fargo Housing Market Index dropped to 55 in February after dipping to 57 in January. The decrease came as a surprise to economists, who had expected the index to inch up to a reading of 58.