Housing Starts Declined 14.8% in January, Driven by Multifamily Weakness

Washington, DC, February 16, 2024-Privately‐owned housing starts in January were at a seasonally adjusted annual rate of 1,331,000, 14.8% below the revised December estimate of 1,562,000 and is 0.7% below the January 2023 rate of 1,340,000, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced.

Single‐family housing starts in January were at a rate of 1,004,000; this is 4.7% below the revised December figure of 1,054,000. The January rate for units in buildings with five units or more was 314,000.

According to the NAHB, "The multifamily sector, which includes apartment buildings and condos, decreased 35.6% to an annualized 327,000 pace."

Says Truist, "Headline housing starts in January came in well below consensus, but we note that this was driven entirely by weak multi-family activity. Permitting for multi-family remained weak, indicating that there is likely more declines on the horizon. Single family continues to be the bright spot in new construction results posting a high teens gain in starts and over 40% increase in permits, though note that both of these lap easy 2023 comps and single family results are still well below January 2022 and 2021 levels. The question in 2024 will be the cadence of Fed cuts and rate spreads with the result directly impacting starts direction, in our view."

Privately‐owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,470,000. This is 1.5 percent below the revised December rate of 1,493,000, but is 8.6 percent above the January 2023 rate of 1,354,000. Single‐family authorizations in January were at a rate of 1,015,000; this is 1.6 percent above the revised December figure of 999,000. Authorizations of units in buildings with five units or more were at a rate of 405,000 in January.

Privately‐owned housing completions in January were at a seasonally adjusted annual rate of 1,416,000. This is 8.1% below the revised December estimate of 1,541,000, but is 2.8% above the January 2023 rate of 1,377,000. Single‐family housing completions in January were at a rate of 857,000; this is 16.3% below the revised December rate of 1,024,000. The January rate for units in buildings with five units or more was 538,000.