Housing starts did fall 2.6 percent in January but the 1.246 million annualized rate is well above Econoday's consensus for 1.232 million. Details show a 1.9 percent rise for single-family starts to a 823,000 rate, offset by a 10.2 percent decline in multi-family units to 423,000. Year-on-year, however, both components are very positive, up 6.2 percent for single-family homes and at a very strong 19.8 percent for multi-units.
Permits rose 4.6 percent in January to a 1.285 million rate that also easily beat the consensus, for 1.233 million. But here single-family permits, which are very closely watched, fell 2.7 percent to a 808,000 rate that is still, however, 11.1 percent higher than a year ago. Multi-family permits jumped to 477,000 from a 398,000 rate but are up a relatively modest 3.5 percent from a year ago.
This report is always volatile and bumpy from component to component but in sum, housing starts and permits are pointing to continuing strength for new homes where lack of supply held down what nevertheless was a solidly positive 2016 for the sector.
There are lots of moving parts and lots of volatility with housing starts & permits but the bottom line has been strength in the key reading of single-family permits, a contrast to weakness in single-family starts. Multi-family permits have been weakening, though starts here have been strengthening. The Econoday consensus for starts is a 0.5 percent gain to a 1.232 million annualized rate with permits expected to rise 0.4 percent to a 1.233 million rate.