Housing Starts Edge Up 1.5% in January

In the wake of the worst year ever for single-family home building, overall new home building increased 1.5 percent to a seasonally adjusted annual rate of nearly 700,000 units in January, buoyed by a jump in multifamily housing starts, according to newly released figures from the U.S. Department of Commerce.

Building of single-family homes reached a rate of 508,000 units, which is 1.0 percent below the revised December figure of 513,000.

"Today's solid housing starts report indicates that builders are putting more of their crews back to work, and adds to the growing field of evidence that the overall housing market is gradually but consistently moving in the right direction," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "In addition to today's numbers, recent builder surveys have indicated steadily increasing optimism regarding market conditions while the number of improving housing markets nationwide has grown substantially over the past six months," he noted.

"The fact that the three-month moving average for housing starts has now increased for nine consecutive months and is approaching the 700,000 mark for the first time since October of 2008 is indicative of a solid recovery in housing activity stemming from recent firming in employment and consumer confidence measures," said NAHB Chief Economist David Crowe. "Housing production is still far from what would be considered normal in a healthy market, and many challenges remain for home builders in terms of tight credit conditions, difficult appraisals and the continued flow of foreclosed properties on the market-all of which are certainly slowing the pace of improvement in both housing and the overall economy."