2/16/2007
Regis J. Sheehan & Associates
Housing starts in January fell sharply to their lowest level since August 1997, according to Robert Sheehan, consulting economist for the National Apartment Association.
“The January starts reflect a combination of factors,” Sheehan said. “Unseasonable weather in a major portion of January both good in the Northeast and bad in many other parts of the country along with a deepening housing recession produced the change. It is still not clear when the bottom in the housing construction market will be reached. There are too many competing directions occurring in the factors that impact the housing market.”
The housing starts rate for January was estimated at a 1.408 million unit seasonally adjusted annual rate, according to the U.S. Department of Commerce, down 14.3 percent from the 1.643 million rate for December. Single-family construction dropped 11.2 percent to a 1.108 million rated from 1.248 million a month earlier. Apartment (units in structures with 5 or more units) starts plunged 20.5 percent to a 276,000 unit rate from 347,000 in December. Total multifamily construction starts dropped 24.1 percent to a 300,000 unit rate in January from 347,000 units a month earlier.
Housing starts declined significantly in all regions of the country in January with the exception of the Northeast. Starts during January dropped 28.5 percent in the West to a 301,000 unit rate; 15.2 percent in the Midwest to 195,000 units; and 11.8 percent in the South to a 716,000 unit annual rate. They increased 8.9 percent in the Northeast to a 196,000 unit rate.
Building permit activity declined 2.8 percent to a 1.568 million unit annual rate in January from the 1.613 million revised rate for December. Single-family permits were off 4 percent. Total multifamily permits were essentially unchanged with a 0.4 percent increase, and the apartment component was unchanged.
Revisions in the starts levels for 2006 produced a total of 1.802 million units down 12.9 percent from the 2.068 million for 2005. Single-family starts were down 14.6 percent to a 1.465 million unit rate from 1.716 million units a year earlier. Total multifamily starts slipped 4.1 percent to 336,000 units in 2006 vs.352,500 units in 2005. Apartment construction declined 5.8 percent to 293,400 units from 311,400 in 2005.