A new housing development in San Jose, California. (Photo: Sean O’Flaherty/Wikimedia Commons)
Housing starts in the US, which refers to the number of new private homes built during a given month, fell 3.8 percent to a 1.1 million annualised rate in January this year, from a 1.14 million pace in December 2015, according to Commerce Department data and reported Bloomberg.
The median forecast of 76 economists polled by Bloomberg stood at 1.17 million.
Although all four regions of the US witnessed a drop in construction, a winter storm in the East Coast probably deepend the setback at the end of last month.
The National Oceanic and Atmospheric Administration noted that the winter storm was rated as the fourth-most impactful storm since 1950, given the accumulation as well as the concentration of residents within its path.
“This is January, so seasonal adjustment could be a factor and weather could be a factor,” said Scott Brown, Chief Economist at Raymond James Financial, Inc. in St Petersburg, Florida. Moreover, “people are a little shell-shocked – buyers might be a little reluctant to step in still.”
In the Bloomberg survey, economists’ estimates for new home construction ranged between 1.1 million and 1.23 million.
Meanwhile, permits dipped 0.2 percent to a 1.2 million annualised rate, implying little scope for a rebound in February.
Last month’s drop in starts was led by a 3.9 percent decline in construction of single-family homes to a 731,000 rate.
Regionally, the Midwest registered the largest fall last month at 12.8 percent. The Northeast saw housing starts drop 3.7 percent, while starts in the South and West slipped 2.9 percent and 0.4 percent respectively.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
