New residential construction in the U.S. pulled back in the month of January, according to a report released by the Commerce Department on Wednesday, although the report also showed a jump in building permits.
The Commerce Department said housing starts fell by 2.6 percent to an annual rate of 1.246 million in January after jumping by 11.3 percent to a revised 1.279 million in December.
Economists had expected housing starts to rise to 1.232 million from the 1.226 million originally reported for the previous month.
Multi-family housing starts showed a notable pullback, slumping by 10.2 percent to a rate of 423,000 in January after spiking by 45.8 percent to 471,000 in December.
The drop in multi-family starts was partly offset by an increase in single-family starts, which rose by 1.9 percent to a rate of 823,000.
Meanwhile, the report said building permits, an indicator of future housing demand, jumped by 4.6 percent to a rate of 1.285 million in January after rising by 1.3 percent to a revised 1.228 million in December.
Building permits had been expected to climb to 1.232 million from the 1.210 million originally reported for the previous month.
With the much bigger than expected increase, building permits reached their highest level since hitting 1.286 million in November of 2015.
Multi-family permits surged up by 19.8 percent to a rate of 477,000, although single-family permits dropped by 2.7 percent to 808,000.
On Wednesday, the National Association of Home Builders released a separate report unexpectedly showing a continued decrease in U.S. homebuilder confidence in the month of February.
The report said the NAHB/Wells Fargo Housing Market Index dropped to 65 in February from 67 in January. The decrease surprised economists, who had expected the index to inch up to 68.
The housing market index moved lower for the second consecutive month after reaching its highest level in over eleven years in December.
by RTT Staff Writer
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