Housing construction dropped everywhere in the US in January but the Northeast

New Developments News
Applications for building permits, considered a good sign of future activity, were up 10.4 percent in the United States in January, however. Daniel Acker/Bloomberg

WASHINGTON (AP) — US home construction fell 6 percent in January but applications for building permits, which typically signal activity ahead, rose sharply.

The decline pushed home and apartment construction down to a seasonally adjusted rate of 1.58 million units last month, compared with 1.68 million in December, the Commerce Department reported Thursday.

Single-family construction starts dropped 12.2 percent while construction of apartment units rose 16.2 percent.

Construction fell 12.3 percent in the Midwest and 11.4 percent in the West. It dropped 2.5 percent in the South. The only region of the country that saw an increase last month was the Northeast, where construction rose by 2.3 percent.

Applications for building permits, considered a good sign of future activity, were up 10.4 percent in January to an annual rate of 1.88 million units.

Even with the January dip, ultra-low mortgage rates, and rising demand from Americans ready for a bigger house after a year of living in a pandemic will in all likelihood mean a strong year for the housing market in 2021.

That push had already begun in 2020 with home construction rising 7 percent in 2020 to 1.38 million units. That was the strongest showing since a housing boom in 2006.

“We still expect recovering demand, low mortgage rates, and a shortage of supply to support a healthy rate of new home construction and the risk may be for further upsides surprises,” said Nancy Vanden Houten, lead economist at Oxford Economics.

Still, Vanden Houten expects the pace of housing construction will moderate somewhat this year as the desire to build collides with high lumber prices, as well as a shortage of available land and workers.

Follow us on Facebook, Instagram, and Twitter @globehomes. Subscribe to our free real estate newsletter — our weekly digest on buying, selling, and design — at