At first glance, the new construction data from the Commerce Department Wednesday appeared encouraging for home builders. But a quick look down the page revealed that the entire gain was due to a surge in multifamily construction.

Overall starts in January were at a seasonally adjusted annual rate of 596,000, 14.6% ahead of the revised December estimate of 520,000 but still 2.6% behind the January 2010 rate of 612,000. Single-family starts, however, dropped 1% from December to 413,000, 19.2% off the pace of January last year. The numbers, minus the unexpected jump in multifamily starts, were in line with Wall Street expectations.

Permits were also down, again driven by volatility in the multifamily sector. Overall permits in January were at a seasonally adjusted annual rate of 562,000, 10.4% behind the revised December rate of 627,000 and 10.7% off last year's January pace of 629,000. Single-family permits were off 4.8% from December and 17.3% behind January, 2010.

The Northeast continued its recent run as the most volatile region with an increase in starts overall of 41.8% from December to an annual pace of 78,000, 11.4% ahead of January last year. Single-family starts, however, fell 12.8% to a pace of 41,000, 29.3% below last January. The Midwest saw a surge in both multifamily (+36.4% to a pace of 90,000) and single-family starts (+25.5% to 69,000), but the categories remained 1.1% and 92.% below January, 2010. In the South, overall starts were up 15.8% to a pace of 307,000, still 5.8% blow last January's estimate, with single-family down 7.7% to 205,000, 25.2% behind the pace a year earlier. The West saw multifamily drop 9.7% to 121,000, 3.2% behind January 2010, with single-family up 5.4% to 98,000, still 4.9% behind a year before.

In permits, the Northeast also was the most volatile region, with authorizations off 38.5% from December to 72,000 overall and single-family down 37.3% to 47,000, 7.8% off last year's pace. The Midwest was off 5.3% to 89,000 overall, down 6.3% from January last year, and single-family was flat with December at 66,000, 19.5% behind last year The South was up 11.4% overall from December to 284,000, 10.4% off January 2010, with single-family up 3.9% to 215,000, 19.5% behind last January. The West was down 27.3% to 117,000 overall month to month, 18.2% behind last year's pace, with single family down 1.1% to 93,000, 14.7% below January, 2010.

Not seasonally adjusted, builders started 25,600 single-family homes in January, 2,200 in the Northeast, 2,900 in the Midwest, 14,300 in the South and 6,100 in the West. They applied for 26,200 single-family permits, 2,700 in the Northeast, 2,800 in the Midwest, 15,000 in the South and 5,700 in the West.