Housing Starts (Jan.)

At first glance it appears that housing starts had a very strong start to the year. The 9.7% m/m jump in January more than reversed December’s decline. But the volatile multifamily sector was responsible for most of that gain, and single-family starts only saw a modest 3.7% m/m rise. With inventory so low, the fact that single-family building permits edged back was something of a disappointment. But we doubt that weakness will persist. Strong sales expectations should help starts to make solid progress this year.