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Privately owned housing starts fell 14.8% on a month-over-month basis to a seasonally adjusted annual rate of 1,331,000 in January, according to the U.S. Census Bureau and the Department of Housing and Urban Development. The estimate is 0.7% below the January 2023 rate.

Single-family starts declined 4.7% to a rate of 1,004,000 in January, according to the report.

“The pullback in the multifamily market is the story behind today’s weak housing starts report,” says Zonda chief economist Ali Wolf. “There were just 314,000 [seasonally adjusted annual rate] multifamily housing starts in January. Besides the brief drop in 2020, multifamily starts are at the lowest level since January 2019 and well below the 506,000 seen last January.”

Wolf says the pullback in the multifamily market was expected given capital constraints, lower levels of rent growth, and “the fear of an oversupply in some markets.”

Privately owned housing units authorized by building permits trended down month over month as well, falling 1.5% to a seasonally adjusted annual rate of 1,470,000. Permits increased 8.6% on a year-over-year basis, though. Single-family permit activity in January increased 1.6% month over month to 1,015,000. Multifamily permits were at a rate of 405,000 in January.

Privately owned completions fell 8.1% month over month to a seasonally adjusted annual rate of 1,416,000 in January. Completions increased 2.8% compared with January 2023 levels.

Single-family completions fell 16.3% month over month to a rate of 857,000 in January.

“Construction of new homes slowed in January, dropping nearly 15% from December’s annualized rate,” says Kate Wood, home and mortgage expert at NerdWallet. “Though more than a million new homes would be built annually at January’s pace, the drop-off is still fairly stark.”

The January completion rates for units in buildings with five units or more was 538,000.

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