New Housing Starts Tank in January

The seasonally adjusted rate of new building permits fell to 937,000, which is 5.4% below the revised December rate of 991,000 but 2.4% higher than the January 2013 rate of 915,000. The consensus estimate called for 995,000 new permits. The October number marked the year-to-date high.

Single-family housing starts fell to an annualized rate of 537,000 in January, down 15.9% from the revised December rate of 681,000.

Permits for new single-family homes fell 1.3% in January, to an adjusted annual rate of 602,000, from a revised total of 610,000 in December.

The December total was revised up by 51,000 new starts, which accounts for about half the January drop. The weather is going to get a good share of the blame for the other half of the decline. The important thing remains inventory, and that continues to rise slowly.