US housing starts declined 4.5% month-over-month to a seasonally adjusted annual rate of 1.309 million (consensus 1.355 million) from a downwardly revised 1.371 million (from 1.382 million) in December. Building permits increased 0.1% month-over-month to a seasonally adjusted annual rate of 1.339 million (consensus 1.350 million) from an upwardly revised 1.337 million (from 1.330 million) in December. Affordability is the major issue; mortgage demand hovers near its lowest level since 1997 and the lack of growth in both single-family starts (-4.3%) and permits (-1.8%) reflecting inflation and affordability headwinds.
Permits came as no surprise after recent earnings reports from KB Homes and Lennar forewarned that state at play.
The move suggests disruption and demographic influences.
United States Housing Starts January 2023
- US Total housing starts declined by 4.5 percent from a month earlier to a seasonally adjusted annualized rate of 1.309 million in January of 2023, the lowest since June 2020 and well below market expectations of 1.36 million.
- Single-family housing starts were down 4.3% to 841 thousand.
- Starts for units in buildings with five units or more decreased by 5.4% to 457 thousand.
- Starts declined in the Northeast (-42.2% to 119 thousand) and in the Midwest (-25.9% to 123 thousand)
- Starts rose in the South (7.3% to 760 thousand) and in the West (5.5% to 307 thousand).
The housing market had been supported by low interest rates and increasing demand from people moving away from big cities due to the coronavirus crisis, but the momentum slowed with rising inputs amid supply constraints could limit production to ease a shortage of homes. Homebuilding activity has seen an adverse impact from sharply higher mortgage rates on buyer demand and builder sentiment. Further to rising mortgage rates, headwinds come from supply constraints and higher house prices. Rates are now sharply higher (over 6%).
United States Building Permits January 2022
- US Building Permits Building permits rose by 0.1% from a month earlier to a seasonally adjusted annual rate of 1.339 million in January 2023, preliminary data showed.
- Figures came below market expectations of 1.35 million.
- Single-family authorizations fell 1.8% to a rate of 718 thousand
- Multi-segment rose 2.5% to 621 thousand.
- Permits increased in the South (+3% to 762 thousand) and Midwest (+1.7% to 178 thousand),
- Permits decreased in the Northeast (-7.8% to 106 thousand) and the West (-4.6% to 293 thousand).
- It was the first increase in building permits after three consecutive months of declines.
Housing Completions
- Privately‐owned housing completions in January were at a seasonally adjusted annual rate of 1,406,000. This is 1.0 percent (±9.8 percent) above the revised December estimate of 1,392,000 and is 12.8 percent (±13.0 percent) above the January 2022 rate of 1,247,000.
- Single‐family housing completions in January were at a rate of 1,040,000; this is 4.4 percent (±10.4 percent) above the revised December rate of 996,000.
- The January rate for units in buildings with five units or more was 349,000.
Notice of methodology change: Beginning with the January 2022 New Residential Construction release on February 17, 2022, the monthly Building Permits Survey design will change from a representative sample to a cut‐off sample. This change will allow complete local and county data on new housing units authorized by permits to be published on a monthly basis going forward. For additional details on this change and the impact on New Residential Construction, see our FAQ document.
Source: US Census
From The TradersCommunity News Desk