The pace of housing construction hit a three-year high in January as multifamily starts rose nearly 15% while single-family activity declined 1%, according to government figures released Thursday morning.
However, the single-family numbers are stronger than the headlines might suggest: starts for November and December were revised upward by more than 50,000 units.
The Census Bureau reported Thursday morning that single-family starts fell to a 508,000 seasonally adjusted annual rate in January from 513,000 in December.
The December SAAR was the highest since April 2010.
Meanwhile, multifamily starts jumped 14.4% from December to a 175,000 SAAR in January.
The bullish report coincides with the rising builder optimism as reflected in the National Association of Home Builders/Wells Fargo Housing Market Index. The index of builder confidence has risen for five consecutive months and hit a reading of 29 in February -- the highest level in four years.
“This is the longest period of sustained improvement we have seen in the HMI since 2007, which is encouraging,” said NAHB chief economist David Crowe. “However, it is important to remember that the HMI is still very low, and several factors continue to constrain the market. Foreclosures are still competing with new home sales, and many builders are seeing appraisals come in at less than the cost of construction. Additionally, prospective home buyers are finding it difficult to qualify for a mortgage.”
