US Housing Starts Decline 9.8% in January

In January, US housing starts experienced a significant decline of 9.8%, falling to an annualized rate of 1.37 million, after a substantial surge of nearly 16% in December. This drop was attributed to builders' concerns over rising mortgage rates and an oversupply of unsold homes, as the market grapples with current rates near 7% and home prices that are 30% higher than in late 2019. Both single-family and multifamily construction saw decreases, with single-family starts down 8.4% and multifamily starts down 13.5%. Economists had anticipated a smaller decline, reflecting growing fears about the stability of the housing market as mortgage applications hit multi-decade lows. Additionally, while building permits saw a slight increase of 0.1%, this modest gain does little to suggest a robust recovery in housing demand. Overall, the outlook remains cautious as builders navigate a challenging economic landscape.