Starts Fall for Fifth Straight Month, Permits Eke Out Small Gain
Source: Economics Group of Wells Fargo Bank, N.A.Summary High Interest Rates Continue to Challenge Residential Construction
- Total housing starts dropped 4.5% to a 1.309 million-unit annual pace in January. This was the fifth straight fall in housing starts, the longest streak of declines since 2009.
- From today’s report, it is clear that elevated interest rates continue to weigh heavily on housing construction.
- The decline in building activity was broad-based, evidenced by a 4.3% drop in single-family starts and a 4.9% retreat in multifamily starts. Single-family (-27.3%) and multifamily (-8.1%) starts have both fallen considerably over the past year.
- January’s weakness in single-family development was most evident in the Northeast and West, where starts declined 51.6% and 22.5% over the month.