Housing Starts Rise 6.3 Percent In January
February 20, 2002
Nationwide housing starts rose by a surprisingly strong 6.3 percent in January to a seasonally adjusted annual rate of 1.68 million units -- the fastest monthly pace in nearly two years -- the Commerce Department reported today.
"Housing continues to provide much-needed steam to the engines of economic growth," said Gary Garczynski, newly elected president of the National Association of Home Builders (NAHB) and a home builder from Woodbridge, Va.
Garczynski attributed January's good showing primarily to low interest rates on home mortgages and solid home-price appreciation. "These are excellent incentives for home buyers, and they are especially driving first-time purchasers to the market," he said. He added that unusually good weather may also have been a factor in boosting housing production at the beginning of the year.
While overall starts hit their fastest pace since February of 2000, single-family starts posted a 3.5 percent gain to 1.35 million units, their highest rate since December of 1999. Multifamily starts also rallied in January, with a nearly 19 percent gain to 333,000 units that offset about half the ground they lost in the previous month.
Regionally, starts were mixed, with the Northeast and South posting gains of 8.7 percent and 14.4 percent, respectively, and the Midwest and West registering modest declines of 0.3 percent and 3.6 percent, respectively.
Housing permits, which can be an indicator of future building activity, also rose in January by a 3.1 percent margin to 1.71 million units, their best pace since January of 2001. The gain was entirely attributable to activity on the single-family side, where permits rose 6.6 percent to a 1.33-million-unit rate. Multifamily permits dipped 7.4 percent to 377,000 units.
"In all, the nation's housing market has started off on the right foot in the new year," said Garczynski. "We're expecting total starts in 2002 to about equal last year's healthy 1.6 million units."
Source: National Association of Home Builders