New residential construction in the US was more robust than expected in January according to the Census Bureau, even as builders continued to face labour and land shortages.
Housing starts fell by 2.6%, but at a higher-than-forecast seasonally adjusted annual rate of 1.246 million. Starts for December were revised up to a rate of 1.279 million.
Building permits increased by 4.6% at a rate of 1.285 million, suggesting that construction may rebound in the months ahead.
Economists had forecast that housing starts were flat compared to the prior month, at a seasonally adjusted annual rate of 1.226 million, according to Bloomberg. They had estimated that building permits were little changed as well, up by 0.2% to a seasonally adjusted annual rate of 1.23 million.
Builders continue to struggle with labour shortages and a lack of developed lots, according to the National Association of Homebuilders (NAHB). The NAHB’s February report on builder sentiment showed that optimism settled back to a “normal range” as buyer traffic fell.
Housing starts tend to be volatile month-to-month, especially in the multifamily segment.