Single-family housing starts posted a big gain in January amid continuing signs of a larger housing market slowdown across the U.S.
New home construction jumped 25.1 percent from December, and overall residential starts increased 18.6 percent, according to U.S. Housing and Urban Development and Commerce Department data first reported by Bloomberg. The jump in new home starts marked the biggest one-month gain in 40 years, attributed in part to a rise in demand from homebuyers now that mortgage rates have dropped.
If the January rate for residential home starts remained constant through the year, construction would begin on 1.23 million homes. That would be an increase from the government’s projections using December numbers. That showed only 1.04 million new homes would be built in 2019.
The positive signs for the housing market happened to arrive on the same day that the Labor Department reported dismal monthly job gains. The U.S. economy added just 20,000 new jobs in February, far below analyst expectations of 185,000.
And despite the January housing start figures, data has shown the U.S. housing market has been steadily slowing over the past year, with homeowners struggling to sell existing homes. In the third quarter of 2018, home flipping had dropped to its lowest levels in three years, and home affordability has been at its lowest levels in a decade. [Bloomberg] — Keith Larsen