U.S. Housing Starts Surged In January
The US Commerce Department reported Wednesday that housing starts in the nation’s beleaguered real estate market rose more than expected in January to their highest level in four moths but permits for future housing starts dropped sharply after a healthy gain in December. The report seems to indicate that the US housing market is still hovering around a bottom.
The January gain in housing starts, according to the report, was 14.6 percent to a seasonally adjusted pace of 596,000 units, the highest level reported by the agency since September. December starts were revised downward from an initially reported pace of 530,000 units to 520,000. Economists in a recent Reuters survey had projected housing starts to climb to a 554,000 pace. Compared to numbers reported in January 2010, residential construction is down 2.6 percent.
The gain in January starts were fueled b a 77.7 percent rise in the volatile multi-family homes sector, while single-family starts rose by just 1 percent. The recovery in housing is being slowed considerably by an oversupply of homes that is putting downward pressure on sales prices. Because of the high unemployment rate, housing will struggle to recover even after the broader economy begins to strengthen.