Washington: Construction of new US homes jumped in January, reversing the declines seen in recent months, government data showed Friday.
A flurry of activity in the South as well as in the normally frigid Northeast and Midwest sent construction of single-family homes up to its fastest pace in a decade for those regions, the Commerce Department reported.
Meanwhile, new building permits, which are a sign of supply in the pipeline, showed a shift toward apartments and more weakening in the key single-family segment.
Total housing starts rose 18.6 percent to a seasonally adjusted 1.23 million units, overshooting economists’ expectations.
Construction started on single-family homes rose 25.1 percent to an annual rate of 926,000.
Economists said December’s sudden fall in construction was inspired by the rout on Wall Street, which decimated Americans’ net worth. Stock prices have since recovered much of those losses.
Permits rose 1.4 percent to a nine-month high of 1.35 million units, also overshooting economists’ expectations.
Permits for multiple-unit dwellings jumped to an annual rate of 482,000, their highest level in 10 months, but single-family home permits fell 2.1 percent, hitting their slowest pace in 17 months at an annual rate of 812,000.
The December numbers were well within broad margins of error and officials warn trends in the housing data may take as much as six months to appear, with each month’s estimate subject to broad revision.
Weakness in the housing sector last year prompted concerns for US economic growth in the near term but analysts say demand is expected to recover this year as mortgage rates fall and construction recovers.