Housing permits surge in January – The Property Chronicle
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Housing permits surge in January

Residential Investor

Housing permits, considered a leading indicator for future construction activity and the broader economy, surged to a 15-year high in January. The jump was supported by increases in the dominant single-family category and the multifamily category. Total housing starts did fall for the month, but the drop comes on the heels of a sharp gain in the previous month. Overall, housing continues to be one of the strongest areas of the economy.

Total housing starts fell to a 1.580 million annual rate from a 1.680 million pace in December, a 6.0% decrease. Month-to-month volatility in housing construction can be influenced by weather conditions. From a year ago, total starts are off 2.3%. Still, January was the fourth-highest pace since 2006.

The dominant single-family segment fell 12.2% for the month to a rate of 1.162 million. Despite the drop, single-family starts are up 17.5% from a year ago. Starts of multi-family structures with five or more units jumped 16.2% to 402,000 but are still off 35.1% over the past year.

For housing permits, total permits rose 10.4% to 1.881 million in January (see first chart). Total permits are 22.5% above the January 2020 level and at the highest level since May 2006. Single-family permits were up 3.8% at 1.269 million, the highest since August 2006 (see chart) while permits for two- to four-family units rose 19.6% to 55,000 and permits for five or more units surged 28.0% to 557,000. Combined multifamily permits were 612,000, the highest since June 2015 and second-highest since January 1990.

Residential Investor

About Robert Hughes

Robert Hughes joined the American Institute for Economic Research in 2013 following more than 25 years in economic and financial markets research on Wall Street. He was formerly the Head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to that, he was a senior equity strategist for State Street Global Markets, senior economic strategist with Prudential Equity Group and senior economist and financial markets analyst for Citicorp Investment Services.

Articles by Robert Hughes

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