WASHINGTON – Builders broke ground in January on the most U.S. single-family homes in more than four years and permits for future construction rose, an indication the industry’s momentum carried over into 2013.
Work began on 613,000 one-family houses at an annual rate last month, the most since July 2008 and up 0.8 percent from December’s 608,000, Commerce Department figures showed today in Washington. Total housing starts dropped to a 890,000 rate, less than forecast and restrained by a slump in construction of multifamily units, which is often volatile.
Faster hiring and easier access to credit are needed to help complement historically low mortgage rates and stoke a sustained real-estate rebound. Rising sales at builders such as PulteGroup Inc. and Lennar Corp. indicate housing will keep contributing to growth this year after having emerged as a bright spot in the economy in 2012.
“Housing is very slowly improving,” Sean Incremona, senior economist at 4Cast Inc. in New York, said before the report. 4Cast was the best forecaster for home building starts over the past two years, according to data compiled by Bloomberg. “Housing isn’t likely to collapse. It is still a moderate pace of improvement.”
The median estimate of 85 economists surveyed by Bloomberg projected total housing starts would drop to a 920,000 annual rate. Estimates ranged from 870,000 to 1 million. The prior month’s figure was revised up to 973,000, the most since June 2008, from a previously reported 954,000 pace.
Permits increased to a 925,000 annual rate, the most since June 2008. They were projected to climb to a 920,000 annual rate, according to the survey median. Applications that are higher than the level of starts signal residential construction may strengthen.
“The drop in starts reflects a correction from the strength we saw earlier,” said Incremona.
Work on multi-family homes, such as apartment buildings, plunged 24.1 percent to an annual rate of 277,000.
The drop in total starts reflected declines in two of four regions. Construction dropped 50 percent in the Midwest and 35.3 percent in the Northeast. It rose 16.7 percent in the West and 4.1 percent in the South.
The Federal Reserve’s efforts to keep mortgage costs low have helped bring about a turnaround in housing, the industry that was at the center of the financial crisis.