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New Housing Starts Jump

Nationwide housing starts rose 14.6 percent to a seasonally adjusted annual rate of 596,000 units in January, according to figures released by the U.S. Commerce Department. The gain was due to a 77.7 percent increase in the multifamily sector, where significant month-to-month swings in activity are not unusual and where new building has been below expectations for the past several months, according to the National Association of Home Builders (NAHB). Meanwhile, single-family housing starts remained virtually flat for the month, with a 1.0 percent decline.

“Considering the abnormally poor weather conditions that prevailed across most of the country in January, along with the continuing difficulty that builders are having in obtaining financing for new construction, the fact that single-family starts held virtually unchanged while multifamily starts posted solid gains is encouraging,” said Bob Nielsen, NAHB chairman and a home builder from Reno, Nev. “Any gain in housing production means more people are being put back to work, and is a sign that builders are preparing for improving demand for new homes in the spring.”

Permit issuance, which can be an indicator of future building activity, declined 10.4 percent to a seasonally adjusted annual rate of 562,000 units in January. This decline, however, comes on the heels of an unusually large gain in December that was precipitated by building code changes going into effect at the beginning of the new year.