Housing finished last year on the uptrend and is starting the new year very strong. Housing starts surged in January to the second highest rate of the expansion, at 1.326 million annualized vs an upward revised 1.209 million in December. The strength is centered in multi-units, which had been lagging, but also includes a strong monthly rise in the dominant single-family category.
Permits, in confirmation of optimism for housing demand, have been outperforming starts and continue to do so, also surging in January to a 1.396 million rate from 1.300 million for the best showing of the expansion. Once again multi-units are catching up, rising very sharply to one of the highest readings of the expansion and offsetting a small decline for single-family units where permits are, nevertheless, just off at their expansion high.
A negative in the report is a 1.9 percent decline in completions to a 1.166 million rate that won't be adding immediate supply to a new-home market that is depleted. But the jump in starts points to supply relief over the next half year with permits pointing to relief through the second half. After the setback in yesterday's retail sales report, housing once again is clearly a key driver of the economy.