Dive Brief:
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Housing starts unexpectedly slipped 3.8% in January to a 1.10 million annualized rate, down from a 1.14 million rate in December, the Commerce Department reported Wednesday. January housing starts were a slight 1.8% higher than in January 2015.
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New applications for building permits, a predictor of future construction activity, declined 0.2% last month but were 13.5% higher than January 2015.
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Single-family construction saw the steepest decline in January, at 3.9%, and multifamily dropped 3.7%. January's overall starts fell to the lowest level in three months.
Dive Insight:
January starts failed to meet expectations, as economists surveyed by Bloomberg had expected results to come in closer to 1.17 million.
Experts attributed the decline to the severe winter storm on the East Coast in January, as well as reluctance from some buyers to take the leap into homeownership. The disappointing showing signals "there is a limit to how much gains in residential real estate will boost growth at the start of 2016," according to Bloomberg.
All four U.S. regions saw housing start declines last month, with the Midwest falling 12.8%, the Northeast slipping 3.7%, the South decreasing 2.9%, and the West down 0.4%.
The slip in January housing starts comes one day after the NAHB/Wells Fargo Housing Market Index reported a drop in homebuilder confidence this month, largely due to a lack of available land and labor.
The housing starts report will be followed by new home sales, existing home sales and pending home sales reports, which are set to be released later this month.
