U.S. Housing Production Levels Off in January, Post 2016 Multifamily Surge
According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, housing starts returned to trend, dropping 2.6 percent to a seasonally adjusted annual rate of 1.246 million units.
Multifamily production fell 10.2 percent to 423,000 units after an unusually high December 2016 reading, whereas single-family starts ticked up 1.9 percent to 823,000 units.
"A settling of housing production is in line with what we are hearing from builders -- that they are largely optimistic about current market conditions but still face supply-side headwinds and regulatory hurdles," said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas.
"Some pull back in housing production is unsurprising after an overly strong multifamily reading last month," said NAHB Chief Economist Robert Dietz. "As we move forward in 2017, we can expect the multifamily sector to continue to stabilize and single-family production to move forward at a gradual but consistent pace."
Regionally in January, combined single- and multifamily housing production rose 55.4 percent in the Northeast and 20 percent in the South. Starts fell by 17.9 percent in the Midwest and 41.3 percent in the West.
Overall permit issuance rose 4.6 percent in January to 1.285 million units. Single-family permits fell 2.7 percent to 808,000 units. Meanwhile, multifamily permits increased 19.8 percent to 477,000 units.
Regionally, permits rose 29.6 percent in the Northeast, 9.9 percent in the South and 5.3 percent in the Midwest. The West registered a decline of 13.2 percent.