Multifamily housing starts took off like a rocket in January, rising 80% while single-family starts fell 1% during the month, according to new government figures released Wednesday morning.
The U.S. Census Bureau reported that multifamily starts spiked to a 171,000 seasonally adjusted annual rate in January from a 95,000 rate in December. (MF starts hit a previous high of 168,000 units back in August. However, during the fourth quarter, MF starts averaged below a rate of 100,000 units.)
A falling U.S. homeownership rate appears to be fueling demand for apartment rentals with multifamily real estate investment trusts becoming some of the hottest stocks on Wall Street. The Federal Housing Administration has stepped up its support for multifamily sector by financing the development and refinancing of 150,000 rental units in 2010.
Meanwhile, single-family construction remains in the doldrums. The Census Bureau reported that single-family starts fell to a rate of 413,000 units (seasonally adjusted) in January from 417,000 in December.
Compared to the same month a year ago, single-family starts have cratered by 19%.
"Construction activity picked up nicely in January, with broad-based gains and particular strength in the apartment and condo markets," said Mike Larson of Weiss Research. "At the same time, future activity is poised to slump thanks to a notable downturn in permitting. So I'd characterize the first month of 2011 as a mixed bag for the beleaguered housing sector."
Single-Family Housing Starts
