New Home Demand Keeps Rising

Demand for newly built single-family homes continues to rise, with both building permits and construction starts for such properties increasing in January.

The Census Bureau reported today that building permits issued for construction of single-family rose a seasonally adjusted 1.9 percent in January, marking the 10th consecutive month where they have either risen or held steady. The annual rate of 584,000 permits reflects a 29.2 percent increase from the January 2012 rate of 452,000.

Construction starts on single-family homes rose 0.8 percent in January, to a seasonally adjusted annual rate of 613,000 units. For the year, that represents a 20.0 percent increase from the January 2012 rate of 511,000 units.

Apartments, condos skew figures

Overall construction starts on housing of all types was down 8.5 percent for the month, owing to a sharp decrease in new construction of multiunit buildings such as apartments and condominiums. However, monthly data for multiunit construction is volatile, and January’s decline appears to be due to a reporting anomaly the month before.

Construction starts on housing properties of five or more units fell to an annual rate of 260,000 units in January, down from December’s rate of 352,000. However, December’s figures represented a spike from 261,000 in November, which is more in line with the pattern since last fall. For the year, January’s rate still represents a 34.7 percent increase in multiunit construction starts from the January 2012 level of 191,000 units.

Multiunit permits up

Figures for building permits issued for multiunit residences have been somewhat more consistent than construction starts, increasing 1.0 percent in January to an annual rate of 311,000. For the year, permits issued for residences of five or more units were up 46.7 percent from their January 2012 level of 212,000.

Overall housing construction starts of all kinds were up 23.6 percent from their January 2012 levels, while total building permits are up 35.2 percent over the same period.

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