WASHINGTON, March 12 (Reuters) – U.S. single-family homebuilding fell in January amid harsh winter weather, and a strong rebound is unlikely, with permits for future construction declining.
Single-family housing starts, which account for the bulk of homebuilding, dropped 2.8% to a seasonally adjusted annual rate of 935,000 units in January, the Commerce Department’s Census Bureau said on Thursday. Data for December was revised lower to show starts rebounding to a rate of 962,000 units instead of the previously estimated 981,000-unit rate.
The report was delayed by last year’s shutdown of the federal government. Groundbreaking on new single-family housing projects tumbled 33.3% in the Northeast and fell 4.6% in the densely populated South. Starts rose in the Midwest and the West regions. Heavy snow and frigid temperatures slammed large parts of the country in January.
Single-family starts dropped 6.5% year-on-year in January. Homebuilding has been hampered by tariffs on imported goods, including lumber and vanity cabinets, worker shortages amid an immigration crackdown and higher mortgage rate rates.
Though mortgage rates have declined this year, stimulating home purchasing, the U.S.-Israeli war with Iran is pushing up oil prices and boosting U.S. Treasury yields. Mortgage rates track the benchmark 10-year Treasury yield.
Homebuilder sentiment has remained depressed, suggesting that new single-family home construction is unlikely to significantly improve in the near term.
Starts for housing projects with 5 units or more, a very volatile segment, surged 29.1% to a rate of 524,000 units in January. Overall housing starts increased 7.2% to a rate of 1.487 million units. They advanced 9.5% year-on-year in January.
Permits for the future construction of single-family housing units fell 0.9% to a rate of 873,000 units in January. Permits decreased 11.6% from a year ago.
Building permits for housing projects with 5 units or more tumbled 13.4% to a rate of 453,000 units in January. Overall building permits dropped 5.4% to a rate of 1.376 million units. They declined 5.8% year-on-year in January.
Residential investment, which includes homebuilding, has contracted for four straight quarters.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama )
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